The report predicts a growth for the construction sector of 24% over the next three years
The Glenigan 2025 Summer Forecast places an emphasis on the private housebuilding sector, expecting an 18% increase in activity in 2027.
Other sectors, such as industrial & commercial, will see a steadier growth.
A resurgence is expected after the spending review
Between 2025 and 2027, with extra infrastructure funding promised during the Spending Review last week, it is expected that the construction sector will bring improvements to the UK economy and more public funding will be brought about.
Growth is expected to be at 3% in 2025, 10% in 2026, and 11% in 2027, coupled with greater confidence from the consumer and in business.
The previous Glenigan forecast predicted a boom for the industry starting this year, however due to political instability both within and without the UK, and following on from a rough second half of 2024, this has not yet come to pass.
Still, the current forecast suggests that the new government has found its footing, and more certainty is being placed in the markets. Domestic demand has increased, and there has been a growth in underlying construction starts in the last quarter.
Glenigan 2025 Summer Forecast puts private sector in the lead
Due to the rise in residential starts over the last four months, it is expected that the private sector will lead the charge and lift housing market activity performance by 18%.
Shortly behind private housebuilding will be sectors such as new office construction, retail, hotel and leisure, and industrial, taking advantage of online retail catalysts for building more warehouse and logistics facilities.
Commenting on the Forecast, Glenigan’s economic director, Allan Wilen, said: “It’s been a frustrating few years for the construction sector, just as there seems to be light at the end of the tunnel a new set of headwinds seems to buffer it, leading to prolonged stagnation. Yet recent events indicate we’re finally turning a corner. Consumer spending power and confidence are improving. This has supported an upturn in housing market activity and is expected to help drive private housebuilding over the next three years.
“The promise of some refreshingly strategic spending from the Government will certainly send a positive signal to contractors and subcontractors nationwide with spending earmarked for a number of big and small projects presenting plenty of opportunities.
“We should also not underestimate the mercurial nature of geopolitical events. Whilst the US tariffs have caused turmoil across the world, the UK’s relatively lighter treatment may help to renew private investors enthusiasm to put their money in our built environment. Of course, trade negotiations are ongoing and volatile, so construction businesses need to approach predicted growth with an element of caution. However, as it currently stands, the signs are positive and the industry can look forward to an extended period of increased activity.”
The Glenigan 2025 Summer Forecast can be accessed on the Glenigan website.
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