Industrial construction projects: A strong start to 2025

The first quarter of 2025 has seen notable activity across the industrial construction projects.

According to Glenigan data for Q1 2025, industrial project starts have risen 66% year-on-year, providing a bright spot in an otherwise challenging market. Detailed planning approvals have also climbed by 15% compared to 2024, suggesting a strengthening pipeline for future projects. However, it’s not all positive news, as main contract awards fell 45% compared to the previous year, indicating a delay in converting planned projects into active sites.

Advanced Manufacturing Leading the Way

A significant portion of current and upcoming industrial construction projects is being driven by the UK’s focus on advanced manufacturing. Backed by £4.5 billion in public funding announced in both 2023 and again in March 2025, the government has prioritised four strategic sectors: automotive, aerospace, life sciences, and green industries.

Automotive

The automotive sector has seen substantial investment as part of the shift toward electrification and sustainable vehicle technologies:

• Rolls-Royce has committed £300 million to expanding its Goodwood Manufacturing Facility (pictured) (Glenigan IDs: 23008550 and 25089979).
• Agratas Building One, an EV battery manufacturing facility, is well underway, with steelwork contracts now signed. Once complete, it will supply battery cells for approximately 500,000 vehicles annually (Glenigan ID: 24244104).
• Toyota has announced the Toyota Circular Factory at its Burnaston plant in Derbyshire. Initial activities to develop the recycling and remanufacturing centre are expected to begin in Q3 2025, although formal plans are still in early stages.

Aerospace

The aerospace sector continues to attract major investment, focusing heavily on new technologies:

• BAE Systems is progressing with a new £220 million factory building at its Rochester site (Glenigan ID: 21374953) and a £25 million warehouse fit-out project in Sheffield (Glenigan ID: 25056712).
• Anduril Industries plans to open a new manufacturing and R&D facility for advanced drones, supported by a £30 million UK government contract. Site selection is underway. (Glenigan ID: 25187033).
• Helsing, a German tech firm, announced a £350 million investment into UK operations, including drone manufacturing, with plans yet to be finalised.

Life Sciences

The life sciences sector is also gaining ground.

Accord is planning a £50 million manufacturing plant in the UK, currently at the pre-planning stage (Glenigan ID: 25184906).

Green Industries

Significant projects in the green industries sector are helping drive the next phase of industrial construction:

• Development of 16 Compact Nuclear Power Stations is progressing, with the first five sites expected to cost around £2.2 billion each. (Glenigan ID: 19395162).
• Holtec Britain is planning a £325 million nuclear components factory in South Yorkshire
• The HyNet Hydrogen Production Plant in Ellesmere Port, a £350 million project, is moving through planning (Glenigan ID: 22136034).

A Promising Outlook for Industrial Construction Projects

Despite challenges in converting contract awards into starts, the overall outlook for industrial construction projects remains positive. Strong government support, strategic sector investments, and a growing pipeline of planning approvals are set to keep the sector busy in the years ahead.

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