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Construction Back To Pre-Covid Levels By 2022
Glenigan’s 2021-2023 Construction Industry Forecast shows activity has rallied and is on an upward trajectory since the start of the year. 2022...
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From Duff To Chuffed – Housing Boom On The Way
Glenigan is predicting an absolute boom in construction over the next two years, particularly residential, following a bit of a duff 2025.
Revised figures say the UK construction sector will grow 21% over the next two years. Private housebuilding remains on course to grow significantly, with activity still predicted to rise by 20% in 2027
Commercial office starts are set to continue their ascent, while increasing consumer confidence will unlock opportunities for industrial, logistics, retail and hotel & leisure
Private Residential
Following a very positive outlook predicted in June, figures have been reassessed, following a softening in market confidence and a drop in property transactions during Q.2/Q.3 2025.
The initial rise in private housing starts during the first four months of 2025 proved short-lived. Following April’s stamp duty increase, starts fell back during the second half of the year. Apartment projects were especially weak as slow building safety regulator (BSR) approval delayed project starts.
However, despite these setbacks, housing market activity has been broadly stable during the second half of the year. This has been supported by rising household incomes, with the number of mortgage approvals for house purchases close to their pre-pandemic average.
The outlook remains positive. Stronger economic growth is expected to lift housing market activity over the next two years. Rising real incomes and further interest rate cuts are expected to lift house-buyers' confidence from 2026. Furthermore, supply-side restraints are also expected to ease as the BSR reduces the backlog of projects awaiting approval. Meanwhile planning reforms are expected to help release additional sites for development, supporting sector growth during the latter stages of the forecast.
Other sectors
Renewed growth is anticipated in 2026 and 2027, despite many verticals slipping back during 2025.
Whilst the industrial sector suffered from a drop in manufacturing projects, this was offset by a spurt in warehousing starts. This growth neatly anticipates higher consumer spending and sustainable increases for this type of project. This, in turn, will likely see further demand for logistics and light industrial space from online retailers and third-party carriers.
Happy days are here again
Whilst the industry will be frustrated that a reversal of fortune will not come as quickly as thought back in May/June 2025, there will be a collective sigh of relief that the negative impact of international conflict, trade wars and policy speculation has not done more damage.
Overall, the UK construction sector has done well to weather what has become a persistent storm, punctuated by aggressive peaks and troughs in activity, and is positioning itself to kickstart activity following the November 2025 Budget.
Picture: Full steam ahead! UK construction to return to growth in 2026 – especially when it comes to home building.
www.glenigan.com
Article written by Brian Shillibeer
26th November 2025