While the first quarter of 2025 may have seemed unremarkable for the UK construction sector on the surface, with output officially flatlined at 0.0 percent, the real story unfolds when one looks at what lies beneath. The surprising 27 percent surge in new construction orders suggests that the tide may be turning, even if the waters remain calm for now.
The Office for National Statistics (ONS) reports that new work in construction rose by 0.9 percent between January and March, offsetting the 1.2 percent dip in repair and maintenance. It’s a balancing act that results in a net zero for overall quarterly output, but developers and contractors aren’t throwing in the towel — far from it. That jump in new orders signals a growing pipeline of future work, potentially reshaping the outlook for the rest of the year.
Contractors working on site have noticed this curious paradox themselves. At a small residential project just outside Manchester, foreman Alan Bristow noted, “We’ve had a steady hand-to-mouth winter, but bids are suddenly getting green-lit. It feels like the taps are being turned back on.” His team recently secured two more local jobs, both funded and confirmed within a month — a much quicker pace than the backlogged lull that defined much of 2024.
This upturn in new orders also indicates renewed confidence from clients and developers, despite lingering concerns over borrowing costs and labour shortages. In part, the more predictable weather of early 2025 helped—something echoed in many contractor survey responses reviewed by the ONS. One project manager in Kent said that February’s mild, dry spells allowed their crew to complete foundation work well ahead of schedule, which in turn unlocked faster payment tranches and accelerated planning for upcoming phases. 🌤️🏗️
Contrast this with the sentiment reported in other private industry indices like the S&P Global UK Construction PMI, which have painted a gloomier picture. These surveys consistently reported contraction in construction activity over the same period. This divergence with ONS data may speak to the lag between on-the-ground sentiment and formal, logged economic activity. In many cases, firms feel the slowdown acutely — especially in sectors like office development or speculative commercial builds — even as official statistics remain stable or marginally positive.
Builders are also grappling with two different speeds within the industry. On the one hand, public infrastructure and large-scale housing developments are picking up momentum, buoyed by renewed government contracts and investment in green energy construction. On the other, small-scale private home improvements and routine maintenance are slowing down, largely due to cost-of-living pressures that have households tightening their budgets. A roofing specialist in Liverpool mentioned that enquiries for minor upgrades had dropped significantly, while full-scale re-roofs or solar installations tied to government subsidies were holding steady.
The 0.5 percent growth in construction output in March may seem modest, but in a sector where even small movements carry weight, it offered a welcome morale boost. That growth was shared between both new work and repair efforts, a rare moment of dual progress that defied the downward revision of February’s numbers. It’s worth noting how February’s initial 0.4 percent growth was later adjusted to just 0.2 percent, which underlines how volatile and difficult to pin down construction figures can be in real time.
Some of the resilience in March can be traced to regional projects ramping up as weather conditions allowed for uninterrupted work. In Gloucestershire, for instance, a school expansion project had been plagued by weather delays throughout the winter, but warm March mornings allowed crews to pour concrete and raise steel frames without the dreaded rain delays that typically push such timetables back by weeks. That visible progress also buoyed confidence within the community, as parents and teachers finally began to believe that the new classrooms would be ready before the next academic year.
New orders, meanwhile, have been driven by multiple factors — not least of which is the increasing clarity around regulatory changes in planning, fire safety, and building performance standards. Over the past year, several contractors had hesitated to commit to new bids, wary of shifting compliance costs. But as guidelines become more established and financing starts to thaw, confidence is returning. A Midlands-based firm, which focuses on sustainable housing, shared how several of their proposals that had been sitting dormant since late 2023 were finally given the go-ahead in Q1, primarily due to updated government guidance and confirmed funding streams for net-zero ready homes 🌱🏘️
Another major contributor to the positive shift in orders is the repositioning of investor interest. After a tough year in 2024, institutional investors are once again showing interest in construction as part of long-term portfolios. Pension funds, for instance, are committing to community housing and healthcare facilities, driven not just by return on investment but ESG mandates. This has injected fresh capital into regional development authorities, particularly in Northern England and parts of Wales, where shovel-ready projects were waiting on financing.
Still, caution lingers. The rising cost of building materials, while less volatile than last year, continues to put pressure on margins. Contractors report still having to reprice quotes within 30 to 60 days, especially on jobs involving imported components. Steel prices remain sensitive, and custom joinery firms have also noted backlogs in timber imports due to global shipping disruptions. As one interior architect quipped while measuring out a newly framed loft extension in Surrey, “You can sign the deal in January and by March, the budget’s already sweating.”
Labour availability, too, remains a pain point. Skilled tradespeople are in short supply, especially electricians and bricklayers, a trend worsened by post-Brexit workforce shifts and retirements. While apprenticeship schemes are picking up, the lag in training new workers means most firms are still bidding with a sense of cautious optimism, knowing that workforce availability might be the bottleneck when orders turn into boots on the ground. 🧱👷
Despite these challenges, many within the sector are heartened by the pipeline building beneath the flat surface of quarterly output. The surge in new orders feels like a tide swelling just out of sight. It may not have broken over the industry yet, but for many firms, there’s real hope that a more active second half of the year lies ahead.
As one project manager overseeing a mixed-use build in Birmingham put it while glancing over revised Gantt charts, “You can feel something shifting. It’s not dramatic, not yet. But things are aligning — weather, capital, confidence. You give me two more months of this, and we’ll be back in growth mode for sure.” The cranes may have been still for a while, but with order books growing thicker, the hum of engines is ready to return to Britain’s construction sites. 🏢📈