Glenigan,
one of the construction industry’s leading insight experts, releases the May
2025 edition of its Construction Index.
The
Index focuses on the three months to the end of April 2025, covering all
underlying projects, with a total value of £100m or less (unless otherwise
indicated), with all 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.
Construction starts saw a welcome lift in the
three months to April. Overall, the value of underlying work starting on-site
rose 7% on the previous quarter and remained 3% ahead of last year’s levels, a
sign of resilience despite challenges elsewhere.
Housebuilding was the clear bright spot,
helping to prop up wider industry performance. Private and social housing drove
a 24% quarterly rise in project-starts. Private housing alone surged 29%
year-on-year, while social housing experienced a 3% upturn annually after a
strong spring showing.
Performance in non-residential verticals was
mixed. While some sectors, including community & amenity, health and
offices, saw strong gains, others, including education, hotel & leisure and
retail, posted sharp declines. Meanwhile, civils suffered a significant
setback. Starts fell 22% quarterly and annually, reflecting a slowdown across
infrastructure and utilities projects.
Providing further insight on these results,
Allan Wilen, Glenigan’s Economics Director, says, "Builders were reporting
falling workloads at the end of last year, reflecting a period of real
uncertainty across the construction sector. However, the latest figures,
particularly in residential, suggest that fortunes may be starting to turn.
“This uptick in activity is encouraging, but
sustained recovery will depend on confidence filtering through the supply
chain. The Government’s much-anticipated spending review in June will be a
crucial moment. If it brings clarity on major infrastructure investment, it
could unlock momentum not just for big-ticket schemes, but the smaller, local
projects captured in this data too; the kind councils are waiting to
greenlight.”
Taking a closer look at the sector verticals
and regional outlook…
Sector Analysis – Residential
Residential construction saw a significant
boost in the three months to April, with overall starts rising 24% compared to
the previous quarter and up 22% on 2024 levels. This growth was driven by both
private and social housing, which showed notable improvements.
Private housing starts surged 22% compared to
the preceding three months, a 29% increase compared to last year.
Social housing also saw strong performance,
with a 29% increase on the previous quarter, and standing 3% up on the same
period in 2024.
Sector Analysis – Non-Residential
Community and amenity project-starts rose 21%
compared to the previous three months, increasing 19% on the same period last
year.
Health project-starts also saw a positive
trend, rising 12% on the previous quarter and standing 2% up on the year
before.
The office sector saw a significant boost, with
starts soaring 61% compared to the preceding three months, and increasing 26%
on 2024 levels, with the £54 million Blackpool Airport office relocation scheme
providing a major uplift.
In contrast, retail and hotel & leisure
projects performed poorly, with retail starts falling 19% against the previous
quarter and down 33% on last year. The hotel & leisure sector similarly
dropped 26% compared to the last quarter, and was down 25% on 2024.
Civil engineering work also declined, dropping
22% against both the preceding three months and the same period last year, with
infrastructure projects, particularly utilities, showing the steepest drops.
Regional Outlook
The South West led regional performance, with
construction starts rising 15% compared to the previous three months and
climbing 29% on the same period last year.
Similarly, the South East saw strong growth,
increasing 32% on the preceding quarter and rising 8% year-on-year.
London experienced a 22% increase in activity
compared to the previous quarter, though it was still down 10% on the previous
year.
The North West also saw an uplift, rising 25%
against the preceding three months, but remained 20% behind 2024 figures.
The North East had a mixed performance,
declining 4% against the previous quarter but standing 11% up compared to the
previous year
The West Midlands had a more challenging
quarter, with starts rising 16% against the preceding three months, but
declining 6% on the same period in 2024.
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