Construction Project Starts Fall 21% as Tariff Pressures Mount
Glenigan's April 2025 Construction Review shows that the value of construction project starts fell 4% in the first quarter of 2025 compared with the previous three months and 21% year-on-year, as economic uncertainty, cautious clients and trade concerns weighed on the sector.
Fewer major projects worth £100m or more are reaching site, and smaller underlying schemes have also underperformed. Some sectors have won more work, with Community and Amenity main contract awards up 26% on the previous year, but delays between contract award and start on site are holding back activity.
Planning approvals offer a more encouraging signal, rising 8% on the previous quarter. Notable areas include:
• Hotel and Leisure, up 20% year-on-year • Education, up 17% year-on-year, supported by a 21% increase in capital funding in the 2025/26 budget • Civil Engineering, up 176% quarter-on-quarter
Glenigan suggests this could support a recovery in starts during the second half of the year if sustained.
New US tariffs add further pressure. UK goods face a 10% tariff, rising to 25% for steel and aluminium, which formed a significant share of the UK's £1.01 billion construction materials exports to the US in 2023. A sharp fall in trade could cost the industry more than £130 million, and displaced global suppliers could redirect goods to the UK and Europe, risking oversupply and price volatility. Firms are advised to monitor costs and secure specifications early.
Economics Director Allan Wilen says the pipeline is strengthening but that lasting growth depends on improved confidence and approvals turning into work on site.
