The UK construction sector is beginning to register early signs of stabilisation, according to the Glenigan Construction Index December 2025, published by Glenigan | Powered by Hubexo. The latest Index reviews the three months to the end of November 2025 and provides a data-led assessment of project-start activity across the UK. For professionals working in digital construction, procurement, planning, and project delivery, the Index remains a reference point for tracking UK construction market analysis, identifying regional variations, and assessing short-term sector momentum.
All figures in the report are seasonally adjusted and focus on underlying projects valued at £100 million or less unless specified. While the sector continues to operate under the weight of economic uncertainty and fluctuating policy signals, the new data suggests a shift in direction, supported by moderate growth in the latest quarter.
Market overview: modest growth after a volatile year
The December 2025 Index records a 3% increase in construction project starts during the three months to November. Although this movement marks only a modest improvement, it is a notable shift after a prolonged period of stalled activity. Despite this uplift, overall performance remains 4% below 2024 levels, reflecting the slow pace of recovery following a year marked by policy inconsistency, weaker investor sentiment, and broader economic turbulence.
Much of the sector will now look toward the Government’s latest Budget for confirmation that previously signalled investment priorities are moving forward. Increased clarity around capital spending and infrastructure commitments could support a more sustained rebound across multiple construction verticals.
Glenigan’s Economics Director, Allan Wilen, highlights the broader context of the results. He notes that although market performance remains weak in several areas, the rate of decline has eased. Strength in the office, industrial, and social housing sectors helped offset weaker activity elsewhere. Wilen also points to the Chancellor’s recent statement as a potential stabilising influence, reinforcing industry expectations of renewed capital investment and maintaining confidence in the construction industry forecast for 2026 and 2027.
Residential sector: mixed performance, but social housing strengthens
The Residential construction sector delivered uneven results. Overall, residential project starts fell by 6% compared to the previous three months and by 18% year-on-year. The downturn was driven by a sharp 16% quarterly decline and a 26% annual decline in private housing activity. Rising financing costs, affordability challenges, and slower development pipelines continue to influence private-sector housing starts.
In contrast, social housing construction delivered a significantly stronger performance. Project starts rose 28% compared with the preceding quarter, finishing 11% higher year-on-year. This growth helped cushion the wider residential decline and reflects increased activity from housing associations and local authorities responding to demand pressures and Government-led funding programmes.
Non-residential sector: strong results in offices and industrial
The non-residential construction market showed more positive momentum. Office project starts continue to outperform, rising 56% compared to the previous three months and 147% above last year’s levels. Major schemes such as the £85.9 million One Hanover Street redevelopment for The Crown Estate in Mayfair, alongside multiple smaller projects, helped lift the vertical.
The industrial sector also performed strongly, with project starts up 33% quarter-on-quarter and 60% year-on-year. Demand for logistics, warehousing, and modern manufacturing facilities continues to drive this trend, supporting the wider shift towards digitised supply chains and technology-enabled industrial operations.
Other verticals presented a more subdued picture. Community and amenity schemes rose by 8% quarter-on-quarter but declined slightly compared to 2024. Civils and infrastructure experienced moderate increases, with infrastructure works up 12% on the previous quarter and 3% annually. However, utility construction recorded a 5% drop both quarterly and annually.
Market weakness persisted across several categories. Hotel and leisure projects saw the steepest declines, falling 28% compared to the previous quarter and 39% year-on-year. The health sector remained flat quarter-on-quarter and 24% lower than 2024 levels. Retail construction continued its downward trajectory, declining 11% quarter-on-quarter and 22% annually. Education construction also dropped, falling 4% in the quarter and 13% annually.
Regional performance: London leads as other regions fluctuate
Regional performance varied significantly. London recorded the strongest growth, with project-starts rising 77% quarter-on-quarter and 56% year-on-year, supported by major commercial and residential schemes. The South West also posted gains, with an increase of 15% on the quarter and 8% compared to 2024.
The North East delivered mixed results but finished strongly, with project starts 72% above last year’s levels, despite a slight quarterly decline.
Other regions struggled. The West Midlands recorded a 13% quarterly fall, while the South East dropped 11% quarter-on-quarter and 19% year-on-year. The North West saw the sharpest regional decline, falling 17% on the quarter and 24% annually.
Cautious optimism as the market enters 2026
The Glenigan Construction Index December 2025 provides early signs that the sector is beginning to stabilise after a volatile year. Despite ongoing challenges, the increase in project starts, strong performance in office and industrial construction, and growth in social housing all contribute to a more optimistic outlook.
For the digital construction sector, the data reinforces the need for continued emphasis on accurate forecasting, efficient delivery, and technology-enabled project management. If Government commitments translate into actual investment, the sector could move towards a more consistent period of growth through 2026 and 2027.
Read next: AI construction powering America’s future – Build in Digital
Are you a building professional? Sign up for a FREE MEMBERSHIP to upload news stories, post job vacancies, and connect with colleagues on our secure social feed.
