"Whilst recovery is a little slower in the non-residential sector, predominantly civils, the various strategies being introduced by the government and the recent Spending Review promise to deliver on a large scale"
- Allan Wilen - Glenigan
The UK construction sector experienced a notable upswing in Q2, with Glenigan’s July 2025 Index reporting a 49% increase in work starting on-site compared to the previous quarter, and a 25% rise on 2024 levels.
The Index, compiled by Glenigan, analyses construction activity for projects valued at £100 million or less, with seasonally adjusted figures covering the three months to the end of June 2025.
The latest data follows Glenigan’s positive summer forecast, which anticipates a 24% rise in construction performance over the next two years. The July Index highlights that recovery across the industry is already gathering momentum, particularly in residential construction.
Residential construction led the growth, with starts rising 76% on the previous quarter and increasing 64% year on year. Private housing was the key driver, surging 95% against the previous quarter and up 84% compared to the same period in 2024. Social housing, by contrast, rose 11% over the quarter but ended 4% down on a year ago.
The £72.9 million Westland Heath development in Sudbury, Suffolk, comprising 206 houses and 36 flats, contributed significantly to the strong performance in the residential sector.
Non-residential construction saw a 21% quarterly rise, although it remained 3% below last year’s levels. Growth in the health and office sectors helped buoy performance, with health project starts rising 41% on the quarter and 29% year on year, and offices up 36% on the quarter and 8% annually. Hotel and leisure also saw a moderate increase, rising 9% on the quarter and 13% on the year.
Other sectors showed more varied results:
Retail rose 5% over the quarter but remained 24% down year on year
Education increased 31% on the quarter but declined 24% annually
Infrastructure grew 2% on the quarter but dropped 38% year on year
Utilities rose 11% on the quarter, finishing 17% lower than 2024
Community and amenity projects fell 4% on the quarter but rose 53% annually
Civils work rose 6% from the previous quarter but was 30% below last year.
“We’re seeing confidence returning at a much faster pace than anyone ever expected. It’s almost hard to believe when you look at how sluggish activity was in Q4 2024 and Q1 2025,” said Allan Wilen, economic director at Glenigan. “However, these results, largely bolstered by a flurry of starts in the residential sector, bear out the predictions our economics unit made in its recent industry forecast.”
“Whilst recovery is a little slower in the non-residential sector, predominantly civils, the various strategies being introduced by the government and the recent Spending Review promise to deliver on a large scale. No doubt, as capital spending is released and critical projects are greenlit, we’ll see further revival across these verticals,” Wilen added.
Regional trends
Q2 2025 saw robust regional growth, with several areas outperforming both quarterly and annual benchmarks.
The South West rose 31% on the quarter and 26% on the year
The North West saw starts rise 72% over the quarter and 23% annually
The South East increased 53% on the quarter and 39% year on year
The North East jumped 75% on the quarter and 26% annually
The West Midlands saw the strongest gains, up 78% on the quarter and 83% on the year
The £56.9 million Portchester Phase 1 scheme in Hampshire, delivering 180 homes, contributed to strong regional growth in the South East.
London rose 34% against the previous quarter but remained 10% down on the year. Other regions recorded more mixed outcomes.
