The UK construction industry is poised for a period of substantial growth in the next two years, driven by renewed economic momentum. According to a forecast from insight firm Glenigan, the sector is expected to see an 8% increase in 2025 and a 10% rise in 2026. This positive outlook is attributed to the continued strengthening of project starts as the UK economy gains momentum.
The forecast notes that project starts have stabilised since the 2024 general election, which saw Sir Keir Starmer’s Labour government take office. In the second half of 2024, private sector activity has seen gradual growth. Glenigan also highlighted that development pipelines are solid, with main contract awards in 2024 already showing a 7% increase over the previous year.
Glenigan’s economic director, Allan Wilen, commented on the optimistic forecast, explaining that growth in the construction sector is expected to be driven by improved consumer confidence, increased household spending, and fiscal changes introduced in the recent Budget. These factors are expected to stimulate growth in areas such as private housing, retail, and the hotel and leisure sectors. Additionally, the Budget’s adjustments to fiscal rules, which allow for increased capital investment, are likely to unlock substantial public sector and infrastructure projects, providing a vital boost to government-funded initiatives over the next two years.
The UK construction industry is set to experience a strong recovery, with a combination of favourable economic conditions and strategic fiscal measures helping to drive future growth.
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