"Once again, the UK construction sector frustratingly seems to have been overtaken by events where a moment in the sunshine over Q2 and most of Q3 has given way to the dark clouds of decline, ushered in by socioeconomic uncertainty both at home and abroad"
- Allan Wilen - Glenigan
Glenigan, the construction industry data and intelligence provider, has released its September 2025 Construction Review. The report examines the three months to the end of August, assessing both major projects above £100m and smaller schemes below this threshold, with underlying figures seasonally adjusted.
The Review presents a detailed breakdown of sector performance, offering a year-on-year view of how activity levels have shifted across key areas of the industry.
Sharp slowdown
While the August edition of the Review suggested momentum was slipping, September’s update indicates that activity has weakened further. External economic and political challenges, combined with stalled public sector programmes, have left construction firms contending with worsening conditions as the industry moves into the final quarter of the year.
Project starts on site fell 22% compared with the previous three months and stood 36% lower than last year. Main contract awards also slipped, declining 33% year-on-year and 24% compared with the preceding three months.
Detailed planning approvals recorded the steepest fall, down 48% during the Review period and 17% lower than a year earlier.
Housing under pressure
The residential sector showed the steepest falls. Project starts declined 10% compared to the same period in 2024, main contract awards fell 44%, and planning approvals were down 42%.
The report links this decline to the impact of higher stamp duty, with private housing particularly exposed to weaker confidence and lower activity.
Some areas of housing nevertheless showed resilience. Student accommodation projects more than doubled year-on-year to £1.064bn, and social housing recorded increases in both starts and approvals.
Private housing continues to account for nearly half of project starts, at 48%, despite posting a 7% year-on-year decline. Future stability in this dominant segment will depend on policy consistency and an improvement in investor and buyer confidence.
Signs of growth outside housing
Beyond residential work, several non-residential verticals recorded growth.
Office projects saw the strongest rise, with project starts up 125% compared with 2024.
Hotel and leisure projects increased 23% year-on-year, with indoor leisure facilities contributing the largest share.
Community and amenity work rose 30% for project starts, while main contract awards increased 120%, largely driven by prison and emergency services projects.
Civils was the only vertical to see an improvement in planning approvals, which surged 171% compared with the prior year. Wales held the largest share of these approvals at 25%, totalling £3.014bn, representing four-digit growth. The North West followed, with a 22% share and approvals up 423% to £2.735bn.
“Once again, the UK construction sector frustratingly seems to have been overtaken by events where a moment in the sunshine over Q2 and most of Q3 has given way to the dark clouds of decline, ushered in by socioeconomic uncertainty both at home and abroad,” said Allan Wilen, economic director at Glenigan. “Weakness spans projects of all sizes, with major and underlying schemes both affected, with the residential sector hit hardest.”
He explained, “Hiring freezes, rising unemployment and the slow approval of projects by the Building Safety regulator have curbed previous enthusiasm to get projects off the ground, evidenced by the particularly poor performance across the board. Whilst there has been a modest uptick in non-residential performance, it’s nowhere near large enough to make up the difference. It all points to a challenging near-term outlook for the industry.”
