UK Construction Starts to Make a Slow Recovery, According to Glenigan Index

Glenigan | Powered by Hubexo, one of the construction industry’s leading insight experts, has released the December 2025 edition of its Construction Index.

The Index reviews the three months to the end of November 2025, focusing on underlying projects with a total value of £100 million or less (unless otherwise stated). All figures are seasonally adjusted.

It’s a report which provides a detailed and comprehensive analysis of year-on-year construction data, giving built environment professionals a unique insight into sector performance over the last 12 months.

The December Construction Index indicates that whilst the sector is by no means out of the woods yet, there’s fresh hope for recovery with a modest 3% project-start increase registered in the three months to November.

However, a sudden burst of activity, largely supported by spikes in office and industrial starts was not enough to prevent performance dipping 4% below 2024 levels. This shows that whilst the signs are encouraging, there’s plenty of lost ground to be made up after a tawdry year punctuated with dramatic episodes of policy confusion and ongoing economic turbulence.

Many will be hoping that the eventual clarity delivered in last month’s Budget will solidify the Government’s intent, outlined initially during the Spring/Summer Spending Review, crystallising into a flurry of renewed activity across most, if not all, verticals.

According to Glenigan’s Economics Director, Allan Wilen, “Whilst performance was generally weak in most areas of the construction industry, the decline was less severe than we’ve seen in other months, with three standout verticals: offices, industrial, and social housing pushing the overall sector back into positive figures during the Index period. Yes, these levels are lower than last year, but given the backdrop of volatile global markets, wild political speculation and policy false starts, the situation could’ve been a lot worse.

He continues, “The Chancellor’s recent statement will have gone some way to reassuring contractors and subcontractors that the Government remains committed to the various capital projects and upgrades it promised earlier in the year. There will be industry-wide fingers-crossed that this materialises into concrete funding so shovels can be committed to the ground in earnest. All this going to plan will bear out the predictions we made last month in our Autumn Forecast, which indicates growth returning to UK construction in 2026 and 2027.”

Sector Analysis – Residential

The Residential sector was a mixed bag, with plummeting activity in the private sector, offset by an impressive growth-spurt in social housing activity.

Overall performance declined by 6% compared to the preceding three months and by 18% compared to 2024 figures, dragged down by private housing construction, dropping by 16% during the Index period and by 26% against the previous year.

As above, Social Housing cushioned the comparative fall, rising 28% compared to the preceding three months to finish 11% up on the previous year.

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Sector Analysis – Non-Residential

Similar to recent Indexes, office starts were the standout performer, experiencing yet another relatively strong period, rising by 56% compared to the preceding three months and 147% above the previous year. Much of this upsurge can be attributed to the commencement of major projects including the £85.9 million One Hanover Street office development for The Crown Estate in Mayfair, London, as well as various other smaller schemes.

Likewise, the industrial sector also performed well, rising by a third (+33%) compared to the preceding three months, finishing almost two-thirds higher (+60%) than the previous year.

Community and amenity project starts increased by 8% compared to the preceding three months, but posted a modest decline of 2% against the previous year.

Civils work starting on-site increased by 4% against the preceding three months but declined by 1% against the previous year.Infrastructure work starting on-site increased 12% compared to the preceding three months and increased by 3% on the previous year. These positive figures were tempered by a dip in utilities activity where starts declined by 5% against the preceding three months and the previous year.

Elsewhere, activity stagnation and decline were consistent. Hotel & Leisure fared worst, recording a 28% drop compared to the preceding three months, and 39% down against the previous year. The Health sector remained flat against the preceding three months, standing 24% lower than the previous year.

Retail also declined 11% against the preceding three months, standing 22% lower than 2024 levels and Education experienced a poor period too, falling 4% against the preceding three months and declining 13% against the previous year.

Regional Outlook

Starts soared across the capital, experiencing the strongest performance of any region, rocketing by 77% compared to the preceding three months to stand 56% up against the previous year.

The South West also performed well, rising by 15% against the preceding three months to stand 8% up on 2024 levels.

The North East experienced a mixed performance, declining a mere 2% against the preceding three months but finishing an impressive 72% up against the previous year.

Conversely, the West Midlands experienced a poor period, declining 13% against the preceding three months and falling 9% compared to last year.

The South East performed poorly, posting an 11% decline against the preceding three months to stand 19% down against the previous year. The North West fared even worse, declining 17% against the preceding three months, resulting in a 24% drop against the previous year.

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