May 2025 Construction Review shows minor relief for industry
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The construction sector has seen a 33% rise in project starts in the May 2025 Construction Review, a rise of 29% from the previous review.
However, this is taken tentatively as it is unlikely that an increase of this volume will continue with market volatility.
Big projects are still lacking; Annual performance ratings reveals that despite the uplift in monthly projects, yearly overall activity has fallen by 17%, with no major projects to contribute to growth.It is hoped this will change in the second half of 2025, as the government has delayed the release of its Spending Review which will not provide confidence for contractors and subcontractors.
It highlights that there is still political and economic uncertainty casting doubt on the sector, especially in the critical infrastructure sector, and a reason to be cautious in the immediate future.
There was also a rise in contract awards for the major projects pipeline, potentially heralding a recovery if public and private confidence improve alongside it. This is not enough to overcome the decrease in main contract awards, which fell by a third in the three months to the end of April (-29%), and falling by 10% year on year.
A spike in planning approvals caused by just one project. Detailed planning approvals rose by a huge 52% annually, and 52% quarterly, marking the most impressive figure in the May 2025 Construction Review.However, this rise is due almost entirely to the Lower Thames Crossing project, with the removal of approvals related to that project showing a much weaker result, falling both annually and quarterly.
Commenting on the May 2025 Construction Review, Glenigan’s economic director, Allan Wilen, said: “The results are superficially impressive, but a closer look reveals a sector still struggling to reestablish its foothold. It’s hardly surprising. UK construction is continuing to adjust to mercurial market conditions, sometimes having to respond in the moment to the constantly shifting international and domestic economic landscape. Particularly, higher operational costs, likely to keep rising in the near future, mean clients are delaying investment decisions. Likewise, contractors are lukewarm to putting shovels in the ground right now when funding is not forthcoming.
“There’s no denying US tariff policy has definitely exacerbated the uncertainty. However, steps to de-escalate trade tensions may go some way to improving the current situation, with steps like the US-UK tariff deal going some way to improving confidence over the coming months. Furthermore, the Government clearly setting out its strategic store will also help to boost momentum as more promised public works are greenlit.”
Source: PBC Today
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