UK construction firms reported hopes of a rebound in market conditions & lower interest rates in the next 12 months in November 2025, offset by signs of cuts to clients' investment spending plans & concerns over long-term UK economic growth. (7/end)
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The S&P Global UK Construction PMI in November 2025 reported that the % of firms expecting a rise in activity in the next 12 months (31%) was slightly higher than those expecting a fall (25%), its lowest degree of optimism since December 2022. (6/n)
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The S&P Global UK Construction PMI in November 2025 also highlighted employment fell for the 11th consecutive month, its steepest fall since August 2020, reflecting a lack of new work to replace completed projects & wage pressures. (5/n)
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... with respondents in November 2025 highlighting fragile market confidence, delays with the release of new projects & a lack of incoming new work, unsurprisingly, given the high level of uncertainty before the government's Autumn Budget. (4/n)
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Looking at the sector breakdown of the S&P Global UK Construction PMI for November 2025, house building (35.4), commercial construction (43.8) & civil engineering (30.0) all had their sharpest falls in activity for 5 & 1/2 years, with... (3/n)
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The S&P Global UK Construction PMI also showed its fastest downturn in construction new orders since the financial crisis in 2009, due to caution amongst clients, concerns over the UK economy & higher uncertainty ahead of the government's Autumn Budget. (2/n)
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Another illustration of the ONS data problems in the largest construction sector. According to the ONS, house building output in 2025 Q2 was only 1% lower than in 2021 (the 'race for space' spike in house building activity) but MHCLG house building completions in 2025 Q2 were 18% lower.
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So, even after GDP growth flatlining in 2023, we don't even get back to even long-term trend growth (over the last 30 years) of 2.0% until at least the 2030s...

The OBR now forecasts 1.49 million net additional dwellings in the UK between 2024/25 & 2029/30, which is politically convenient to say the least. Note the government's 1.5 million new homes target is England only.
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... a slowdown in house builder demand & sales rates, a sharp fall in London house building due to BSR delays on high-rise starts & site viability issues & a hiatus in housing association house building.
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It's interesting that in March the OBR overestimated net additional dwellings in both 2023/24 and 2024/25 but now it thinks it heavily underestimated net additional new dwellings in 2025/26 despite all the negative factors affecting house building this year.

The 1 key positive of the Autumn Budget will be the end of the pre-Budget uncertainty that government has made worse by leaking lots of potential policies to the press to see the PR impact. Then we can see the real impact of the Budget itself. (16/end)
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... even if there are no negative impacts from the Autumn Budget & if the economy, house building & construction is better than expected in the next 2-3 years (a big ‘if’ currently), then a lack of skills & capacity constraints may be an issue. (15/n)
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... the high level of uncertainty over where tax rises will be & its affects plus the Autumn Budget being pushed back to the end of November means that firms have had to be (over)cautious for next year. So,... (14/n)
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Secondly, September & October are when most firms in the construction supply chain (architects, house builders, contractors, subcontractors, builders merchants & manufacturers) do budgets & business investment plans for the year ahead. But,... (13/n)
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In other construction sectors, the high level of uncertainty & high value of new build or 'back to frame' commercial projects (which are often £200 million or more) means investors & clients have adopted a ‘wait-and-see’ approach. (12/n)
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... the high level of uncertainty over potential tax rises in the Autumn Budget has led to poor consumer confidence, especially for large, discretionary spending on home improvements, & homeowners have chosen to save rather than spend. (11/n)
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In terms of housing rm&i, that is heavily reliant on homeowners. Many homeowners have finance available after more than 2 years (27 months) of real wage growth, which would generally have led to a rise in home improvement activity. However,... (10/n)
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