Construction Sector Hit by Sharp Decline in Early 2025
Glenigan's latest figures show the value of construction work starting on site in the three months to March 2025 fell 19% on the previous three months and was 16% lower than a year earlier. Glenigan notes that while raw index values look high, the seasonally adjusted trend is downward.
Residential starts fell 12% both quarter-on-quarter and year-on-year. Private housing dropped 11% on the previous quarter and 9% annually, while social housing fell more sharply, down 15% on the quarter and 20% on the year. Glenigan hopes Spring Statement funding will help unlock stalled schemes.
Non-residential starts fell 24% on the quarter and 22% annually, with a mixed picture by sector:
• Community and amenity rose 5% on the quarter and 1% annually, helped by a £21 million scheme at Catterick Garrison, North Yorkshire • Industrial fell 28% on the quarter and 7% annually • Health fell 35% and 36%, and retail 34% and 37% • Offices fell 8% on the quarter but rose 3% annually • Hotel and leisure fell 30% and 28%, and education 24% and 39%
Civil engineering starts were down 28% on the quarter and 16% on the year. Infrastructure fell 14% on the quarter but was 12% higher annually, while utilities dropped 43% on both measures.
Regionally, the North East stood out, up 6% on the quarter and 17% annually, driven by several major projects. The South West fell 14% on the quarter but rose 3% annually. Northern Ireland dropped 43% on the quarter and 11% annually. London fell 10% on the quarter and 40% annually, and the South East 11% and 18%.
Glenigan expects a more competitive environment ahead but anticipates that government funding from April will help stimulate activity.
