Construction activity is showing signs of having turned a corner, buoyed by a surge in housebuilding, according to the latest industry analysis.
In the May 2025 edition of its construction index, Glenigan found activity had picked up pace in the three months to April, with the value of underlying project starts rising 7 per cent and holding 3 per cent above this time last year.
Housebuilding drove the breakthrough, with residential starts rising 24 per cent quarter-on-quarter and up 22 per cent year-on-year – a sign of renewed confidence in the sector, the analyst said.
But there was a gloomier picture for non-residential construction, which dipped 5 per cent on the previous quarter and fell 12 per cent below 2024 levels.
Civil engineering saw a sharp decline on the back of a slowdown in infrastructure and utilities projects, with starts down 22 per cent compared with both the previous quarter and the same period last year.
Glenigan economics director Allan Wilen said the residential figures provided grounds for cautious optimism after a period of uncertainty and falling workloads.
“This uptick in activity is encouraging, but sustained recovery will depend on confidence filtering through the supply chain,” he said.
He said the government’s spending review next month will be of critical importance.
“If it brings clarity on major infrastructure investment, it could unlock momentum not just for big-ticket schemes, but the smaller, local projects captured in this data too; the kind councils are waiting to greenlight,” said Wilen.
The rise in quarterly residential starts was spurred by private housing, which saw a 29 per cent increase year-on-year, while social housing experienced a 3 per cent upturn annually after a strong spring performance.
There was a more mixed showing in non-residential verticals, with the significant setback in civils accompanied by slumps in the education, hotel and leisure, and retail sectors.
Hotel and leisure fared particularly badly, with starts dropping by 26 per cent on the last quarter and down by a similar amount on the same period last year.
However, those results were tempered by strong gains in offices, health and community and amenity facilities.
The offices sector was a stellar performer, with starts soaring by 61 per cent compared with the preceding three months, and up 26 per cent on 2024 levels, with the £54m Blackpool Airport office relocation scheme providing a major boost.
The South West led the regional league table, with construction starts rising 15 per cent compared with the previous three months and climbing 29 per cent on the same period last year.
There was also strong growth in the South East, where starts increased 32 per cent on the preceding quarter and rose 8 per cent year-on-year.
London experienced a 22 per cent increase in activity compared with the previous quarter, though it was still down 10 per cent on the previous year, while the North West also saw a quarterly uplift, rising 25 per cent against the preceding three months but a fifth down on 2024 figures.
In the West Midlands, starts rose 16 per cent against the preceding three months, but declined 6 per cent on the same period last year.
However, that picture was reversed in the North East, where starts declined 4 per cent against the previous quarter but were up 11 per cent compared with the previous year.
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Kerry Lorimer