Poor performance in major projects continues to drag overall construction activity, according to Glenigan’s latest Construction Review.
Glenigan, a construction insight and intelligence provider, has published its August 2025 Construction Review, covering the three months to the end of July 2025. The report aims to provide an in-depth analysis of UK construction performance across both major projects (over £100m) and underlying projects (under £100m), with all figures seasonally adjusted.
Overall market slowdown driven by weak major projects
The August Review highlights a significant loss of momentum in the construction market. Overall UK project starts fell 17% year-on-year and were down 20% compared with the previous three months. The decline was overwhelmingly driven by weak performance in major projects.
- Main contract awards dropped 26% compared with the preceding quarter and were 39% down year-on-year.
- Detailed planning approvals fell sharply, down 55% against the previous three months and 36% compared with 2024 levels.
This slowdown in approvals and awards suggests a much weaker pipeline for the second half of 2025.
According to Glenigan’s Economic Director, Allan Wilen, “The market remains mercurial, frustrating industry effort towards wholesale recovery. Whilst many will find solace in opportunity within underlying projects, the major project work remains worryingly thin, both on the ground and in the development pipeline.”
He added that government promises from the recent Spending Review must translate into swift delivery of large-scale projects to support economic growth and job creation. Interest rate cuts may help ease financing conditions, but the impact on a weak major projects pipeline remains uncertain.
Underlying projects show resilience
Despite the downturn in major project activity, underlying construction projects under £100m continue to demonstrate resilience and growth.
- Underlying project starts increased 9% both quarter-on-quarter and year-on-year.
- Residential construction was a standout performer, with starts up 10% quarter-on-quarter and 25% year-on-year. Private housing projects saw particularly strong growth, rising 24% compared to the previous quarter and 40% compared to 2024 levels.
- Office developments showed robust momentum, with underlying starts climbing 39% on the quarter and 64% year-on-year, supported by schemes such as The Republic office development in Manchester (£98.8m).
- Healthcare construction projects also grew, up 11% quarter-on-quarter and 20% compared with 2024.
- Underlying civil engineering activity dipped 21% year-on-year but achieved 15% quarterly growth, reflecting the sector’s ability to maintain activity despite wider market challenges.
Market clarity through robust data
The Review also aims to clarify conflicting industry narratives by highlighting Glenigan’s methodology. Unlike sentiment-based monthly surveys, which rely on small sample sizes, Glenigan’s Construction Review draws on official planning application data and provides quarterly, year-on-year analysis. This the company states delivers a more reliable and fact-based picture of UK construction performance.
As Wilen explains: “Ultimately, the Review aims to offer as precise a picture as possible for the sector, so the market can better plan for more high-value decisions.”
Outlook
The UK construction industry faces a mixed outlook for the remainder of 2025. Major projects continue to stall, weighing heavily on the overall market, but underlying activity across residential, office, and healthcare sectors provides grounds for cautious optimism. A stronger pipeline of large-scale schemes will be essential if the sector is to transition from resilience to sustained recovery.
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