Thursday, 16 October 2025
The UK’s construction industry recorded a slight downturn in August, as weaker activity in repair and maintenance offset limited growth in new building projects. According to the latest official data, the sector’s overall output slipped compared with July, though it remains modestly higher over the broader three-month period.
Analysts say the figures point to a mixed picture for Britain’s builders. Demand for small-scale maintenance and renovation projects held up well, particularly in private housing, while larger developments faced continued headwinds from higher borrowing costs, planning delays, and cost pressures.
The report shows that while construction has avoided a sharp contraction, activity levels remain subdued across several key areas, including infrastructure and commercial building. In contrast, home repair and refurbishment work provided a partial cushion, growing strongly over the summer months and helping sustain output through August.
Over the three months leading up to August, construction volumes edged up slightly, supported mainly by residential maintenance and public-sector repair projects. However, new building work, which accounts for the largest share of industry activity, was flat or declining in most categories, reflecting investor caution amid uncertain demand forecasts.
The data follows the UK’s latest GDP update, which showed the broader economy expanding marginally in August. Construction contributed to that limited growth but remains one of the more volatile components of the economy.
Industry observers note that persistent labour shortages and regulatory barriers continue to weigh on productivity, even as material price pressures have begun to ease. Many contractors remain focused on completing existing projects rather than taking on new ones, particularly in the private sector.
While the headline figures suggest that the industry is stabilising after months of uneven performance, the balance between refurbishment and new investment remains fragile. The coming months will test whether easing inflation and improved financing conditions can revive demand for large-scale developments heading into 2026.
Source: OGL
