Glenigan Index of construction starts to end of August 2025

The September Index reveals that the high hopes for an industrywide recovery, forecast through a steady increase in activity during Q.2, were premature, with the value of work starting on-site dipping by 4% in the three months to the end of August, standing 6% lower than 2024 figures during the same period.

The uptick in residential activity observed during the spring and summer, which drove the majority of the recent impressive growth, is starting to slow as Autumn starts. This is giving way to general decline, with starts-on-site falling 18% on the preceding three months, and 16% year-on-year, as persistent international socioeconomic pressures and unpopular Government policies erode investor and consumer confidence.

However, the overall drop in performance was somewhat mitigated in the non-residential sector, which experienced a relatively positive period, registering a 13% increase on the preceding three months to stand 11% up on the previous year.

Commenting on the results, Glenigan Economist Drilon Baca says, “Many contractors and subcontractors will be deeply frustrated by the apparent ‘false start’ performance-wise, especially within the residential verticals. However, as the numbers show, the sector is still in a far stronger position than it was during last winter, holding relatively steady overall when compared like-for-like against last year’s figures, with a modest dip in the single figures.

He continues, “However, we need to be cautious. There remains a high degree of uncertainty. In the lead up to the widely-rumored Autumn Budget Statement, the sector will not be helped by persistent international pressures and, closer to home, ongoing speculation around property tax increases.”

Taking a closer look at the Index results…

Sector Analysis – Residential

The residential sector faced pronounced headwinds. Overall starts were down 18% in the three months to the end of August compared to the previous 3-month period, finishing 16% below 2024.

Private housing fell 16% during the Index period and 16% compared to the previous year.

Social housing fared even worse with activity slashed by almost a quarter (-24%) to stand 17% lower year-on-year.

Sector Analysis – Non-Residential

Performance was generally subdued in non-residential sectors, however, there were some very impressive results within individual verticals.

Activity within offices was outstanding. Starts surged 103% during the Index period and were 232% up on the previous year. These extraordinary figures can be attributed to shovels going into the ground on a number of major developments, including the retrofit of 30 Finsbury Square in London.

It was a mixed bag elsewhere. Industrial project starts edged up by 1% compared to the preceding three months, but were still 11% below 2024 levels. Likewise, health sector activity grew 7%, but was 5% lower compared to last year’s figures.

Elsewhere, community and amenity project starts were down 26% compared to the previous 3 months but saw a 35% increase compared to 2024. Hotel & leisure starts, in turn, dipped 5% but were 4% higher year-on-year.

Civil engineering work inched up 2% on the preceding three months but remained 22% below year-ago levels. Infrastructure project starts rose 12% against the Index period, although they were down 17% year-on-year. Utilities construction declined 9% to finish 27% lower than last year.

The retail and education verticals were the biggest losers. The former took a significant hit, falling 23% compared to the previous 3 months and were down 34% compared to last year. The latter experienced significant setbacks, dropping 14% compared to the preceding three months and 37% when measured against 2024 levels.

Regional Performance

London outperformed other regions, with project starts reaching £2,973 million, up a whopping 39% compared to the preceding three months, and a staggering 36% compared to the same period last year.

Not to be outdone, the North East experienced strong growth, rising 61% against 2024 results and increasing by almost a third (+29%) against the preceding three months.

The West Midlands also posted robust results, up 21% on the previous three months and 36% year-on-year.

In contrast, the South East and South West both registered sizeable declines; the former fell by 15% compared to the previous 3 months, and 21% on the year; the latter dropped 29% and 32%, respectively. The North West slipped 5% on the preceding three months and 12% compared to last year. North of the border, Scotland declined 29% against the previous year and 16% on the preceding three months.