Published: October 22nd, 2025
October brings a mix of political pressure, economic slowdown and infrastructure frustration to the UK construction sector. Output remains sluggish, confidence is flatlining, and tax and regulatory concerns are mounting. At Leading Edge, we’ve reviewed recent updates from ONS, MPA, SIG, S&P Global, and key industry bodies to provide this month’s commentary.
Output & Activity: Recovery Stalls Again
According to the ONS August construction bulletin, total output rose just 0.3% in the three months to August, driven by 1.3% growth in repair & maintenance, while new work fell 0.4%. August output dipped 0.3% month-on-month, following flat performance in July.
This aligns with S&P Global’s PMI data, which showed construction activity contracting sharply in August — the steepest fall since May 2020. Developers cited weak pipelines, labour shortages and hesitation in progressing new phases or tenders.
MPA: “No More Tax” Message to Government
The Mineral Products Association (MPA) has published a strong call for the Chancellor to halt plans for new industry taxes ahead of the Autumn Statement.
In their recent paper, the MPA warned that proposals to raise Landfill Tax and extend the Aggregates Levy could inflate the cost of building projects and add up to £50,000 to a typical house build — particularly through charges on clean excavation waste. The group argued that these tax increases would undermine both housing delivery and the government’s net zero and infrastructure ambitions.
Instead, the MPA is urging government to adopt pro-growth measures, such as:
- Stable policy and regulatory signals
- Capital allowances to incentivise investment
- Support for skills and training in the materials sector
Materials Data: Demand Patterns Diverging
The GOV.UK materials update for September shows that brick deliveries have dropped 5.2% year-on-year, while concrete block deliveries rose 2.7%. These shifts suggest growing pressure in the residential sector, with some relative resilience in commercial or infrastructure segments.
SIG plc — a major supplier of building materials — reported “muted sales” and “prolonged weakness” in UK construction, noting that both new build and RMI activity have slowed, and market conditions remain “challenging” through Q3.
Housing & Planning: Tax Uncertainty, Affordability Concerns
New tax proposals — dubbed the “soil and rock tax” in the press — could raise construction waste costs significantly, according to The Times. Combined with slow planning reform, these pressures are stifling progress in housebuilding.
In London, The Guardian reports that affordable housing requirements could be reduced from 35% to 20% under revised subsidy rules — a move intended to unblock stalled schemes, but which has raised concerns over long-term housing equity.
Infrastructure: Stable but Sluggish
PwC’s September Construction Outlook forecasts around 1% annual growth in infrastructure for 2025, with stronger momentum expected from 2026. But firms continue to cite skills gaps, procurement delays and utilities access as major blockers to delivery, especially in energy, rail, and local transport.
Final Thoughts from Leading Edge
The data suggests a sector operating below potential, with confidence being eroded by unstable policy, fiscal drag, and planning system inertia. While pockets of repair and maintenance activity are holding up, the outlook for new work is much more cautious — and tax policy is quickly becoming a new frontline concern.
At Leading Edge, we work with clients across construction and building materials to respond to these shifting dynamics — through smart market targeting, specification insight and supply chain intelligence.
Get in touch to discuss how we can support your market strategy heading into 2026.
Sources: ONS, S&P Global, GOV.UK, MPA, The Times, The Guardian, PwC, Reuters
Written by the Leading Edge team – October 22nd, 2025
