What is the Construction Industry Growth Forecast for the UK in 2025?
The UK construction industry could well be set for a period of growth in 2025. This comes after a period marked by economic uncertainty dating as far back as the COVID-19 pandemic, as well as the various supply chain disruptions. Industry experts are predicting a promising recovery for the sector, driven by a handful of pivotal factors.
These include infrastructure initiatives, tech advancements, and growing demand in residential and commercial sectors. Getting a handle on the construction industry growth forecast for 2025 gives us valuable insight into so many areas like construction recruitment, skills, apprenticeships, and beyond.
What Is the Economic Outlook for the Construction Sector in 2025?
According to experts, the construction sector is expected to grow by roughly 8%, with a further 10% anticipated by 2026. It’s a growth that’s reflective of recovery in the wider economy, which has faced turbulence over the last few years. PwC predicts a 2.9% real-terms increase in construction spending, which indicates that the sector might benefit from improved market conditions.
One of the biggest drivers of this recovery is government investment in large-scale infrastructure projects like upgraded transport links, renewable energy initiatives, and housing developments. The government has committed to funding a few major projects to stimulate recovery and growth. These projects include HS2 and the redevelopment of critical infrastructure in cities across the UK.
Technology Can Help to Shape the Future of Construction
Advancements in technology are another major factor we can expect to influence the construction industry moving into 2025. Technologies like Building Information Modelling (BIM), drones, and robotics are likely to continue driving productivity and cost efficiency. BIM, for example, streamlines the design and planning stages of construction. It improves project management and reduces errors, as well as gives managers the control to allocate resources more efficiently.
In addition to improving operational efficiency, these techs can reduce costs.
By cutting down on project delays, reducing rework, and increasing safety, construction businesses can boost profitability even as the industry grows. What’s more, tech advancements make construction processes safer, addressing the high rate of accidents, which has long been a major concern in the sector.
The more widely adopted these technologies become, the more the sector will need to adapt. This could mean construction apprenticeships in more tech-based roles, as well as construction skills growth in areas like management and HR.
Green Building Will Become More Crucial in 2025
Sustainability will continue to be a core focus of the UK construction industry. Environmental concerns have been intensifying for some time now, and regulations around carbon emissions are getting even tighter. This means there’s a growing emphasis on building practices that minimise environmental impact. Renewable energy systems, waste management solutions, and sustainable building materials are becoming standard practice in the sector, a trend that might well accelerate in 2025.
The government’s commitment to net zero by 2050 is pushing construction companies to adopt greener policies.
Government initiatives are also incentivising businesses to invest in sustainable tech and materials. The Green Homes Grant is a prime example and was introduced to encourage homeowners to invest in energy-efficient home improvements. It’s already made a big impact on the residential construction market. The demand for energy-efficient buildings and green infrastructure could continue to drive growth in 2025 and beyond.
Sustainability is financially and environmentally beneficial.
Green buildings usually – though not always – command a higher property value and lower operating costs, which makes them attractive to developers and end-users. The long-term savings associated with energy-efficient buildings are well documented and can offset the initial cost of green construction methods.
Skills Shortages and Construction Apprenticeships
The outlook for the construction sector is generally positive, but there are still challenges we need to address. One of the most pressing concerns is the current construction skills shortage. According to the UK Trade Skills Index, the UK will need an additional 937,000 new recruits over the next decade if we’re going to meet the demand for upcoming projects. It’s a shortage that’s particularly severe in areas like carpentry, electrical work, and plumbing, where skilled tradespeople are in high demand.
What is the cause of the construction skills gap?
An ageing workforce is one of the key reasons for the construction skills gap, as well as a lack of younger workers entering the industry. As older workers retire, we lose their expertise and replacing them can be a significant challenge. To address this, the government and private companies are investing in construction apprenticeships and training programs to develop a new generation of construction workers.
There Are Challenges and Opportunities in Construction Recruitment
Construction recruitment will remain a critical aspect of the industry’s growth in 2025. In addition to addressing the skills shortage, businesses will need to adapt to changing worker preferences and expectations. Our view of work-life balance is changing, and a greater number of people prioritise flexibility and job security. This means companies need to rethink their construction strategies and think laterally when approaching skills acquisition.
The demand for skilled workers is not expected to slow down.
Companies will be increasingly reliant on effective recruitment to meet project deadlines brought on by the sector growth we mentioned earlier. Construction recruitment firms are, therefore, going to play a key role in helping businesses find the right talent for their success.
Need a Recruitment Partner to Make the Most of the Construction Growth in 2025?
At ITS, we provide expert recruitment services for the construction industry. Our specialisms span the sector, and we work to find the skilled professionals you need to support your growth. From construction apprenticeships to tradespeople and management positions, we’ve got the expertise to connect you with the right talent. Get in touch with us today to find out how we can help you.
FAQs
What is influencing the growth in the construction industry?
Economic circumstances, government investment, and tech innovation are all contributing factors, as is increased demand for infrastructure and housing.
Why is recruitment important for the construction sector right now?
The industry is experiencing a skills gap, so talent is in short supply. Recruitment companies can help mitigate this with expertise in finding the right candidates for your company.
How can businesses prepare for skills shortages?
Invest in training, partner with construction apprenticeship schemes, or work with recruitment companies to get the right talent at the right time.
