Glenigan, Powered by Hubexo (Glenigan), one of the construction industry’s leading insight and intelligence experts, releases the January 2025 edition of its Construction Review.
This special edition of the Review focuses on the twelve months to the end of December 2024, covering all major (>£100m) and underlying (<£100m) projects, with all underlying figures seasonally adjusted.
It’s a report which provides a detailed and comprehensive analysis of year-on-year construction data, giving built environment professionals a unique insight into sector performance over the last 12 months.
This special edition of the report details 2024 in-review, comparing year-on-year sector-wide growth and 2025 snapshot.
Special Edition: 2024 in Review
Despite significant economic turbulence, 2024 emerged as a pivotal year for construction, driven by significant gains in major project-starts and steady growth in underlying activity. Key highlights from Glenigan’s report include:
- Project-Starts: Overall, work commencing on-site averaged £10,372 million per month, up 20% from 2023. Major projects (£100 million or more) saw an extraordinary 58% increase, underscoring renewed confidence in large-scale developments. Meanwhile, underlying project-starts (£100 million or less) edged up by 1%.
- Sector Standouts: Underlying Hotel and Leisure construction starts soared by 30%, while underlying education projects rose 7%. Civil engineering also flourished, with infrastructure (+17%) and utilities (+14%) leading the charge.
- Regional Highlights: The South East emerged as the UK’s growth leader with a 17% increase in underlying project-starts. Northern Ireland (+23%) and the South West (+13%) also outperformed, while London faced challenges with a 15% decline.
Challenges Temper Optimism
- Main Contract Awards: Averaging £9,595 million per month, overall main contract awards dipped 4% year-on-year, reflecting caution among developers. Underlying awards decreased by 5%, while major projects also saw a 4% drop compared to 2023.
- Planning Approvals: Detailed planning approvals struggled, falling 19% overall, with major projects hit hardest at a 34% decline. Underlying approvals dropped by 6%.
Underlying Sector Snapshot – Residential
Residential construction starts experienced a challenging year, finishing 4% lower than 2023 levels.
Private housing starts were down 9% compared to 2023, while social housing declined 10%, highlighting ongoing affordability and funding challenges.
Underlying Sector Snapshot – Non-Residential
Non-residential performance was mixed throughout 2024.
Hotel and leisure starts showed strong growth, rising 30% year-on-year.
Education also fared well with starts increasing 7% against last year’s results.
The industrial sector had a modest growth year, with starts growing 4%.
Community & Amenity construction also rose to stand 11% higher than 2023.
Reflecting shifts in workplace trends, performance was poor in the office sector, recording a 19% decline year-on-year.
In contrast, civil engineering thrived, with starts in the sector finishing 16% up on the year before. Infrastructure projects rose 17%, while utilities saw a 14% increase year-on-year.
Regional Performance
Growth was inconsistent regionally. The South East led growth as the strongest performing region of the UK, with project-starts increasing 17% compared to 2023.
Starts in Northern Ireland (+23%) and the South West (+13%) also grew against the previous year.
Yorkshire and the North West also had a good year, with starts rising 8% and 5% year-on-year, respectively.
Some areas of the UK performed poorly, including Scotland and the East of England where the value of projects fell 2% and 1%, respectively.
London also had a challenging year, posting a 15% decline overall against 2023 levels.
Commenting on the Review, Allan Wilen, Glenigan’s Economic Director, says, “While 2024 brought challenges, the construction sector demonstrated remarkable resilience, supported by strong gains in major project-starts including renewable energy and rail projects. Despite Budget constraints and concerns over tax changes dampening growth in late 2024, the outlook for 2025 is positive.
“Increased government and household spending, as projected by the OBR, will likely provide a much-needed boost across key construction sectors, particularly private housing, retail, and leisure. Private housing is expected to see a 13% growth in project starts, with build-to-rent and SME-focused initiatives broadening development activity. Retail projects, while modestly forecasted to grow by 1%, are set to benefit from a more positive economic outlook. The hospitality industry is poised for a revival, with hotel and leisure construction starts predicted to rise by 6% with landmark projects like the £250 million Therme UK development providing an additional boost to sector activity.
“Elsewhere, industrial and civil engineering sectors are set to expand, driven by projects such as the £8 billion Hornsea Four development and £350 million Altalto Immingham facility. Meanwhile, office developments are on track for an 18% growth in starts, with investment in data centres, including the £400 million G Park Docklands Data Centre, reflecting the rise of AI and digital transformation.
“This broad-based growth presents opportunities for contractors to capitalise on emerging trends, especially as major investments in infrastructure, education, and health - such as the £215 million Cambridge Children’s Hospital and the £80.3 million Ardrossan Community Learning and Innovation Hub - gain momentum. With resilience and adaptability, the industry is well-positioned to meet these demands and thrive in 2025.”
Glenigan’s Special Edition of the Construction Review offers invaluable intelligence to help built environment professionals navigate the year ahead and capitalise on growth areas through its sector snapshots. To find out more about Glenigan and its construction intelligence services click here.
