Total UK construction output is forecast to have fallen by 2.9% in 2024. New construction activity fell by 4.3% in 2024, with repair and maintenance falling by 0.9%. A slowly improving UK economy is expected to yield construction growth of 2.1% in 2025 and 4% in 2026.

The economy returned to modest growth in 2024 supported by higher government spending and a recovery in consumer spending. UK economic growth is forecast to be 1.7% in 2025.

Public funded investment was disrupted by the general election in July 2024 and the subsequent review of existing government programmes. The spending review in spring will set out the Labour government’s longer-term funding commitments and priorities, which are anticipated to include increased public sector activity.

The new government is expected to provide greater stability and certainty, and has signalled its intent to increase housebuilding and infrastructure investment during its five-year term.

At the end of 2024, UK construction material prices were 1% lower than at the start of the year. The annual fall in the price of fabricated structural steel was 6.9%, whereas ready-mix concrete prices showed a rise of 4.3% over the same period.

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