What's Happening?
The UK construction industry is experiencing a 'perfect storm' in Q4 2025, with a significant decline in project starts and contract awards. According to Glenigan's analysis, project starts fell by 22% compared to the previous year, and main contract awards dropped by 33%. Planning approvals also decreased, indicating a slowdown in industry momentum due to socioeconomic uncertainties and domestic policy impacts.
Why It's Important?
The downturn in the construction industry has broad implications for economic growth and employment. The decline in project starts and contract awards affects contractors and subcontractors, leading to potential job losses and reduced investment in infrastructure. The industry's struggles highlight the need for policy interventions to stabilize the market and support recovery efforts.
What's Next?
Industry stakeholders may need to adapt to the challenging economic environment by exploring new markets and diversifying their portfolios. Policymakers could consider measures to stimulate construction activity and address regulatory barriers. The industry will likely focus on resilience strategies to navigate the economic uncertainties.
