Of the nine sectors covered by the ONS, seven of them contracted in a disappointing end to the year
The ONS stats for December 2025 show that, overall, construction output in the last quarter fell by 2.1% from Q3 2025.
Within this, new work fell by 2.6% and repair and maintenance fell by 1.5%.
New orders dropped by 3.8%
Private new housing was the largest contributor to the overall drop, falling by 3.6%. Monthly, December alone saw a 0.5% fall in overall output due to a large fall in repair and maintenance of -2.5%, too much to be offset by the 1.0% growth of new work.
Of further concern, the construction output price inflation was 2.7% in the 12 months to December 2025.
However, the news is not totally bleak, as overall in 2025 construction output rose by 1.8%, the fifth year in a row of annual growth.
Private new housing output is still well below the base level from 2023, and overall the stats suggest a weak pipeline heading into 2026.
The ONS stats December 2025 can be found in full here.
Industry concerned with new stats
Brian Berry, chief executive of the Federation of Master Builders, said: “The ONS figures confirming that total construction output fell by 2.1% in Q4 2025 show that conditions for small builders deteriorated significantly towards the end of last year. Falling output alongside a drop in new orders shows that workloads are shrinking and confidence is ebbing away across the sector. The weakness in private new housing is particularly concerning as this demonstrates that Government’s housing targets are falling behind.
“With activity declining across most construction sectors and signs that repair and maintenance work is also slowing, many firms are facing a tough start to 2026. The Government must act quickly to stabilise the economic environment, restore confidence and get projects moving again. That means investing in planning capacity, supporting access to finance, and a clear, long term strategy for housing and construction. Without decisive intervention, there is a real risk that small builders will continue to pull back, making it harder to grow the economy and deliver the homes the country urgently needs.”
Clive Docwra, managing director of property and construction consultancy McBains, said: “After October and November proved disappointing months in terms of output, today’s news will be of further concern to the industry.
“It is particularly concerning to see that total construction new orders fell by 3.8% in Quarter 4 2025 compared with Quarter 3 2025, with this decrease coming mainly from private commercial new work and private industrial new work.
“However, it is important to note that some delays in work could be as a result of a logjam at the Building Safety Regulator, while December’s figures may also reflect a hangover from uncertainty around the Chancellor’s Budget in late November, so the industry will be hoping that an increase in orders will be registered in next month’s figures.”
Richard Cook, senior economics director at Pegasus Group, said: “Yet another decline in construction output for the third consecutive month is a concerning trend that the Government cannot afford to ignore.
“Whilst outputs can fall in December due to a slow holiday period, the continued declines we have seen over the past few months should be a cause for concern. The fact is that persistent issues around skills shortages, an ageing workforce, and a slow-moving planning system are all continuing to hamper growth in the construction industry; failing to address these will set back the UK’s economic growth too.
“The Government has taken a proactive approach to address these problems: for instance, changes to the NPPF and new announcements this week to create more construction apprenticeship and T Level opportunities in education estates – which will develop talent with transferrable skills for the wider sector – will be vital in reversing the decline.
“However, the deep-rooted issues affecting construction outputs cannot be reversed overnight: the Government’s measures will take time to create real change. More needs to be done to address the immediate problems the sector is facing and reverse the decline in output as soon as possible.”
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