Published: 22nd November 2025
As 2025 draws to a close, the UK construction industry remains in a period of contraction — but one marked by nuanced shifts in housing, infrastructure, and labour market dynamics. While confidence remains low, there are early signs that investment and new order volumes may begin to support recovery in 2026.
Activity & Output: Weak Growth, Weaker Outlook
According to the ONS September bulletin, monthly construction output fell by 0.2% in September, continuing a three-month downward trend.
While repair and maintenance volumes held up, new work dropped by 0.4%, with declines in infrastructure and private commercial building.
Construction PMI: Prolonged Contraction
October’s S&P Global UK Construction PMI remained firmly in negative territory at 44.1, its lowest since May 2020. Housebuilding and civil engineering continued to shrink, while commercial work showed only modest resilience.
Surveyed firms reported weak client confidence and reduced tender opportunities, with some pausing new procurement until post-election policy clarity.
Housing Sector: Downturn with a Glimmer of Hope
Trading Economics reports that UK construction orders rose 29.3% year-on-year in Q3 2025, driven by a 17% increase in private housing and a 72.9% surge in public housing orders.
However, housebuilders remain cautious. Taylor Wimpey reported an 11% fall in private sales per site, citing affordability concerns and mortgage constraints. The company cut its build targets for the rest of 2025 and warned that policy signals will be key in 2026.
Site Labour & Supply Chain Disruption
The UK Business Outlook – November 2025 highlights persistent skills shortages, with many contractors reporting difficulties in recruiting groundworkers, bricklayers, and site managers.
Alongside this, a report by Unseen reveals that construction was the second-highest sector for modern slavery reports in 2024, raising compliance concerns. Complex subcontracting chains and reliance on migrant labour remain key risk factors.
Glenigan & Infrastructure Watch
According to the Glenigan Index – November 2025, the value of UK construction project starts fell by 17% in the three months to October, with steep declines in infrastructure and private non-residential sectors.
Glenigan attributes this to delayed public-sector funding, rising materials costs, and election-linked uncertainty in local authority procurement.
Materials & Supply Chain Trends
Build UK’s November report shows improved delivery times for most key materials, but price volatility remains. While timber and bricks are more readily available, electrical components and insulation products are still affected by overseas shipping delays.
The fall in steel prices noted earlier in 2025 has stabilised, though rebar imports remain cost-sensitive.6.
Final Thoughts from Leading Edge
The industry remains in a holding pattern: late‑2025 is shaping up as a time of preparation rather than expansion. With tender pipelines thin, client caution high, and cost/ethical headwinds mounting, firms are wise to focus on agility.
At Leading Edge, we assist clients in:
- identifying early pipeline signals (orders vs output)
- shifting product or service offering into more stable segments (R&M, public infrastructure)
- auditing supply chains for labour/ethical risk and mitigating exposure
- aligning strategy with likely 2026 recovery when project starts may accelerate
👉 Talk to us about how we can support your strategy into 2026.
Sources: S&P Global PMI (FT), ONS output data, TradingEconomics new orders, Taylor Wimpey results (Guardian), Unseen modern‑slavery report (Guardian)
Written by Leading Edge – 22nd November 2025
