Government interventions on planning reform and funding for transportation and housing improves long-term outlook for the sector

Latest News Mon, Aug 11, 2025 6:22 AM

Arcadis, the leading global design and consultancy firm for natural and built assets, has released its Summer 2025 UK Construction Market View report.

This comprehensive analysis provides key insights into the current economic conditions, sector performances, and future projections for the UK construction market, overlaid with challenges and opportunities provided by the Comprehensive Spending Review (CSR).

Despite challenging economic conditions, and continuing global uncertainty, Arcadis’ analysis includes a cautiously optimistic outlook for industry, with several key sectors beginning to scale up, and projections that demonstrate the construction industry growing faster than the wider economy.

While sticky inflation may slow the rate of interest rate cuts, there are early, tentative signs of recovery. Orders have regained some lost momentum, and industry sentiment is improving.

Key highlights from this analysis includes:

  • Continuing recovery in workload. New build construction workload increased marginally in Q1 2025, and the outlook is stabilising.
  • Improved Contractor Performance: Analysis of recent trading updates suggests that many contractors have fared better in 2024 than in the previous year, putting them in a stronger position for when the markets do eventually turn.
  • Places Sector: health, education, prisons and housing are all big winners from a pivot to social infrastructure in the CSR. Innovative 10-year settlements will give contractors the confidence to invest.
  • Resilience Sector: Water companies are scaling up efforts to meet their AMP8 commitments, but programmes are taking time to get started. This will likely lead to workload being delivered in a shorter period.
  • Mobility Sector: The Government will continue to make critical investments in roadways, bridges and key megaprojects, providing long term certainty. Cities have done particularly well: Transport for City Regions settlements total £15.6 billion by 2031/32, representing a real-terms doubling in city-focused transport investment.
  • Procurement Trends: An emerging trend towards single-stage procurement for larger new-build projects is creating opportunities outside of higher risk buildings (HRBs). This model is particularly suited to Tier 2 contractors and is gaining traction in commercial markets outside of London.
  • Tender Price Inflation and Forecast: TPI forecasts remain unchanged as clients and contractors wait for stronger signs of recovery.

Simon Rawlinson, Arcadis Head of Strategic Research and Insight, commented on the findings, stating: "While economic headwinds persist, the construction industry maintains cautious optimism for the future, thanks in part to new government investment and support.

“Our latest analysis underscores the importance of strategic focus and sustained investment.

“The positive momentum in key sectors such as network infrastructure, together with spending review surety in the public sector, provides a foundation for potential sustained growth."

Featured News

Specification news
Innovative Gap House project transforms disused garages...

A council-owned, disused garage plot in Bristol has been revitalised to create...

Read More >>

Specification news
Skills Relay to inspire the next generation of...

PfP Thrive, part of the UK’s leading social enterprise Places for People (PfP), has...

Read More >>

BUILDING PRODUCT LIBRARY - LATEST BROCHURES

ACO Blue Roof Guide – Vol 2 Brochure

ACO Blue Roof Guide...
By ACO Building Drainag...

Download Now >>

Stannah Commercial Brochure Brochure

Stannah Commercial B...
By Stannah Group

Download Now >>

Stannah Midilift CLS Brochure

Stannah Midilift CLS
By Stannah Group

Download Now >>

BUILDING PRODUCT DIRECTORY - LATEST PRODUCTS

Supreme Heavy-Duty Loft Ladder
Supreme Heavy-Duty Loft Ladder

The Supreme heavy-duty loft ladder is supplied as a ready to fit unit. It is manufactured from high...

Read More >>

Designo Loft Ladder
Designo Loft Ladder

Insulated and Airtight wooden loft ladder……sets the standard for long-lasting quality and...

Read More >>

Elite Loft Ladder
Elite Loft Ladder

The Elite heavy-duty loft ladder...The Elite heavy duty concertina loft ladder is supplied without a...

Read More >>

CONSTRUCTION VIDEOS - LATEST VIDEOS

Proctor Air® Product Explainer
Proctor Air® Product Explainer

Proctor Air® is an air and vapour permeable, highly water resistant roofing underlay. Its...

Watch Now >>

Discover the Power of Blue Roofs in Urban Flood Management
Discover the Power of Blue Roofs in Urban Flood Management

In this video, we explore how blue roofs are transforming urban landscapes by helping to mitigate...

Watch Now >>

RMD Profiles - UK Experts in Metal Decking, Design Installation
RMD Profiles - UK Experts in Metal Decking, Design Installation

At RMD Profiles, we’re more than just metal decking. From supply-only solutions to full design and...

Watch Now >>