News Gradual Recovery in UK construction output over next two years
EXCLUDING the potential impacts of the recent US tariff disruption on the global and UK economies, the Construction Products Association’s Spring Forecasts, published this week, show that construction output is only expected to recover gradually. Following two challenging years that have particularly affected the two largest sectors – private housing new build and repair, maintenance, and improvement (RM&I) – total construction output is expected to grow by 1.9% in 2025 and 3.7% in 2026, from a low base.
This is a slight revision down from the Winter Forecasts due to a slow start to activity this year, weaker UK economic growth prospects, higher inflation for longer, and subdued consumer and business confidence. Moreover, rises in the National Living Wage, employers’ National Insurance Contributions, and falling thresholds, from 1 April, will increase costs throughout the supply chain.
In private house building, activity continues to recover gradually, but house builders reported that it has been a slower start to this year than anticipated, as affordability and a lack of demand remain the key constraints, with mortgage rates remaining high and no government policy stimulus. Furthermore, developers working on high-rise apartment blocks continue to suffer from delays of six to nine months at the Building Safety Regulator, which disproportionally affects new house building in London and build-to-rent developments.
On the positive side, however, the Government published its National Planning Policy Framework, and its Planning and Infrastructure Bill is currently being passed in parliament. This may help deal with one constraint, but according to larger house builders, activity from the measures is unlikely to be seen on the ground until at least 2027 due to developments already in the pipeline with planning permission. Overall, private housing output is forecast to rise by 4.0% in 2025 and 7.0% in 2026, and the risks remain weighted to the downside.
Private housing RM&I is the second-largest construction sector, and it continues to benefit from a consistent stream of energy-efficiency, solar photovoltaic, and cladding remediation work. Outside of this, however, activity has been slow to start this year. Overall, private housing RM&I output is expected to rise by 2.0% in 2025, with any growth at the back end of the year, and 3.0% in 2026.
In infrastructure, the third-largest construction sector, activity continues to remain strong on major projects such as Hinkley Point C and HS2, whilst the Lower Thames Crossing has been given the go-ahead as expected, although construction work will still not start until 2027, and it will be privately financed.
Energy generation activity will be the key driver of growth in infrastructure as wind farm activity ramps up, and increases in capital expenditure in the water sub-sector, to deal with high-profile water quality issues, will also lead to a step-change in activity from 2026. However, whilst the headlines coming from government suggest record levels of investment in roads near term, spending on road projects this year will be £5.0 billion less than it previously has been, and only two large road projects are expected to start in 2025. As a result, roads output is forecast to fall this year. Overall, infrastructure output is expected to rise by 1.8% in 2025 and 4.5% in 2026.
£300 million boost to win global offshore wind investment
The UK prime minister, Sir Keir Starmer, has confirmed that £300 million will be invested by GB Energy in the UK’s domestic offshore wind sector. This announcement comes ahead of the summer spending review. The investment forms part of the £8.3 billion pledged to GB Energy over the course of this Parliament and follows initiatives such as the Clean Industry Bonus and the National Wealth Fund.
The funding will aim to mobilise billions of pounds in additional private investment (accompanying the £43 billion already earmarked for clean energy projects since July) and will specifically target growth of the UK’s domestic offshore-wind supply chains. Funding will be available for manufacturers developing offshore turbine components, floating platforms, cables and other crucial technologies. Applications are expected to open at the end of this year and, to be eligible, companies will need to show how the funding will help mobilise long-term investments into UK domestic supply chains.
The prime minister has said: “Delivering the Plan for Change means winning the race for the clean energy jobs of the future, which will drive growth and help us reach clean power by 2030. That is why I am bringing forward much-needed investment in our domestic offshore wind supply chains, strengthening our security and creating good jobs for our welders, electricians, and engineers.”
MMC to play a Key role in Urban Regeneration
A construction specialist is set to play a key role in a major urban regeneration project in Stockport, supporting the delivery of much-needed new homes. Horwick-based Mansell Building Solutions has been appointed by Oak Construction Projects Ltd to provide full-frame, finishes and fire-stopping solutions for Cityheart’s Stopford Park development.
The firm will apply its expertise in modern methods of construction (MMC) and light gauge steel framing on Bosden, the first of three residential buildings planned for the site. Located on the former Stockport College site, Stopford Park will eventually deliver 442 homes, co-working spaces and civic areas as part of the £120 million regeneration of Town Centre West.
Angela Mansell, managing director of Mansell Building Solutions, said: “We’re excited to once again bring our MMC expertise to Stockport on such a transformative scheme.
“Bosden is set to be the largest purpose-built apartment development in the town. We’re excited to be part of the delivery team as our approach provides certainty in time, quality, and cost, which will help deliver projects like this faster and more efficiently.
“This is our third project in Stockport, and it reinforces our commitment to improving our local area, as well as building certainty working with forward- thinking partners who value design, buildability and commercial viability.”
Spring 2025 M35 5
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