In 2024, the gross value added (GVA) of the construction industry in the United Kingdom amounted to almost *** billion British pounds, compared with ***** billion pounds in the previous year.

Construction output in the United Kingdom increased 1.20 percent in May of 2025 over the same month in the previous year. This dataset provides the latest reported value for - United Kingdom Construction Output - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.

Economic uncertainty and inflationary pressures have spurred a degree of instability in the UK economy in recent years. This has spurred a reluctance among private investors to dedicate significant spending towards capital ventures, weighing on lead generation in commercial building construction markets. High construction costs and rising interest rates have led to further apprehension among property developers to engage in new ventures, though long-term government capital procurement frameworks have provided some resilience to wavering provate investemt. Revenue is slated to rise at a compound annual rate of 0.5% over the five years through 2024-25, reaching £22.8 billion. Aided by the release of pent up demand and a stronger than anticipated initial economic recovery from the pandemic, the industry recorded a strong rebound in new orders from pandemic-induced lows in 2021-22, particularly in private commercial and private industrial markets. However, capacity constraints and the impact of reduced new work volumes secured during the height of the pandemic limited output growth. Growth in new order volumes slowed in 2022-23, as economic uncertainty compounded and rising tender prices reduced the propensity of investors to commit to commercial real estate ventures. High borrowing costs continued to weigh on investor sentiment in 2023-24. However, a steady stream of work on projects procured through capital procurement frameworks, including Procure23 and the School Rebuilding Programme, is set to maintain revenue growth through the current year. Revenue is expected to increase by 6.6% in 2024-25. Revenue is slated to climb at a compound annual rate of 0.3% to reach £23.2 billion over the five years through 2029-30. The effects of the UK's economic slowdown will continue to bite in the near term, as weak order books limit remuneration. Input price inflation is set to continue to ease in the medium term. However, material costs are likely to remain elevated and a construction worker shortage will pressure profit. Commitments made by the government as part of capital procurement frameworks will continue to support demand for commercial building contractors in the coming years, while private sector order books should improve as borrowing costs come down.

GDP from Construction in the United Kingdom increased to 35821 GBP Million in the first quarter of 2025 from 35727 GBP Million in the fourth quarter of 2024. This dataset provides - United Kingdom Gdp From Construction- actual values, historical data, forecast, chart, statistics, economic calendar and news.

The number of employees working in the construction industry in the United Kingdom has fluctuated significantly between 2019 and 2024. The most recent data shows that there were 2.06 million people working in the construction sector. Most employees in the UK construction industry are men, according to the same source.

The UK construction market, valued at approximately £398.68 million in 2025, is projected to experience steady growth with a Compound Annual Growth Rate (CAGR) of 3.19% from 2025 to 2033. This growth is driven by several factors, including ongoing infrastructure development projects (like HS2 and other transport initiatives), a sustained, albeit fluctuating, demand for residential housing, and increasing investment in renewable energy and utility infrastructure to support the UK's net-zero targets. The residential sector remains a significant contributor, but commercial construction is also expected to see moderate growth, fueled by ongoing investment in office spaces and retail developments, though potentially impacted by economic fluctuations and remote work trends. The industrial sector's performance will depend heavily on broader economic conditions and supply chain resilience. While these positive drivers exist, the market faces constraints including material price volatility, skilled labor shortages, and potential regulatory hurdles associated with sustainability initiatives. The need for environmentally sustainable construction practices is creating both challenges and opportunities, pushing innovation and driving demand for green building materials and technologies. Major players like Kier Group PLC, Balfour Beatty PLC, and Laing O'Rourke PLC are navigating these complexities, competing for market share and adapting to evolving industry demands. The segmentation of the UK construction market reveals a diverse landscape. Residential projects continue to be a key driver, influenced by demographic shifts and housing policy. Commercial construction, encompassing office buildings and retail spaces, is subject to economic cycles and technological disruptions. The industrial sector experiences fluctuating demand depending on manufacturing and logistics activity. Infrastructure projects, including transportation and utilities, provide significant and often long-term opportunities, although subject to government funding cycles. Lastly, the energy and utilities sector shows substantial growth potential due to the country’s transition towards renewable energy sources and investments in grid modernization. The regional distribution of construction activity reflects disparities in economic development and housing needs across the UK, with London and the South East generally showing higher activity levels compared to other regions. The forecast period (2025-2033) anticipates continued growth, albeit at a moderate pace, shaped by economic conditions, government policies, and the evolving demands for sustainable and resilient infrastructure. Recent developments include: August 2023: McAleer and Rushe announced that they had begun constructing the last phase of Southbank Place in London. The GBP 138 million (USD 174.34 million) Southbank Place Building 5 development is situated 100 m from the London Eye. This development is part of the master plan for the Shell Tower in London's South Bank.March 2023: The UK Department of Transport announced over GBP 40 billion (USD 50.54 billion) of capital investment in transport across the next two financial years, which will drive significant improvements for rail and roads across the market.. Key drivers for this market are: Investments in Transport Infrastructure. Potential restraints include: Investments in Transport Infrastructure. Notable trends are: Increase in GVA of Construction Industry Driving the Market.

Graph and download economic data for Production: Construction: Total for United Kingdom (PRCNTO01GBQ657S) from Q2 2010 to Q1 2025 about United Kingdom, IP, and construction.

Several of the largest new residential construction projects in the United Kingdom with a construction start date in 2025 were found in London. The Planned Investment and Major Works Programme in London was valued at 1.02 billion British pounds. The housing construction market in London London is one of the best-known cities in the world. It is an important financial and economic centre, accounting for the highest share of GDP out of all the regions in the UK. It is also home to the West-End and the British Museum, and it boasts a vibrant cultural life. The economic importance and popularity of the city are some of the factors fostering a high demand for housing construction in London. In addition to the 14,270 housing starts in London in 2023/24, there was also a similar volume of housing completions. In comparison, the number of private housing starts in the UK as was estimated to be 135,000 in 2024. House repairs in the UK Housing repair and maintenance was one of the segments with the highest market shares in the UK construction industry. Meanwhile, new private housing construction represented 18 percent of the construction market in the country in 2024. The revenue of housing repair and maintenance in Great Britain has been increasing at a fast pace in the past years.

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Construction Market Size 2025-2029

The construction market size is forecast to increase by USD 1,288.3 billion at a CAGR of 5.5% between 2024 and 2029.

The market is experiencing significant growth, driven by the rise in residential and commercial infrastructure projects worldwide. This trend is fueled by increasing urbanization, population growth, and economic development in various regions. One key trend is the increasing adoption of green buildings, which are in the Innovator's stage in some regions and the Early Majority in others, leading to varying adoption rates and penetration levels. Furthermore, the integration of Artificial Intelligence (AI) in the construction sector is revolutionizing the industry, enhancing productivity, efficiency, and safety. As the industry evolves, companies must navigate this obstacle by exploring cost-effective solutions, such as shared equipment ownership models or renting, to remain competitive.
To capitalize on the market's potential, businesses should focus on innovation, collaboration, and operational excellence, ensuring they deliver high-quality projects on time and within budget. By addressing these challenges and embracing the opportunities presented by the market, companies can effectively position themselves for long-term success. Another key driver is the integration of Artificial Intelligence (AI) in the construction sector, which is revolutionizing the industry by improving efficiency, reducing costs, and enhancing safety.

What will be the Size of the Construction Market during the forecast period?

Explore in-depth regional segment analysis with market size data - historical 2019-2023 and forecasts 2025-2029 - in the full report.
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In the dynamic market, securing permissions for building projects remains a crucial aspect of the industry. Cold storage facilities, a niche segment, continue to gain traction in the hospitality and leisure sectors, driven by innovative technologies and consumer demand. Smart cities are at the forefront of integrating sustainability regulations into commercial buildings, leading to increased usage of eco-friendly construction materials and raw resources. Site preparation and worker safety regulations are under constant scrutiny, ensuring compliance and adherence to industry standards.
The retail sector is also embracing technology, with the integration of automation and smart systems becoming increasingly common. Innovative technologies continue to shape the construction landscape, from 3D printing to modular construction, streamlining processes and reducing costs. Regardless, the industry's focus on sustainability and safety regulations ensures a responsible and forward-thinking approach to construction projects. However, the high cost of construction machinery poses a substantial challenge for market participants.

How is this Construction Industry segmented?

The construction industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

Type

  Buildings construction
  Heavy and civil engineering construction
  Land planning and development
  Specialty trade contractors


End-user

  Private sector
  Public sector


Product

  Traditional
  Sustainable


Geography

  North America

    US
    Canada


  Europe

    Germany
    UK


  APAC

    China
    India
    Indonesia
    Japan
    South Korea


  Rest of World (ROW)

By Type Insights

The buildings construction segment is estimated to witness significant growth during the forecast period. The market encompasses various sectors, with buildings construction being a prominent and evolving segment. This segment includes residential, commercial, and multifamily buildings, each contributing significantly to the market's growth. For instance, Egypt's ambitious project to develop a new administrative capital, the New Administrative Capital (NAC), is a notable example. Located approximately 45 kilometers east of Cairo, NAC is designed to alleviate overcrowding and pollution in the current capital. A key player in this transformation is the China State Construction Engineering Corporation (CSCEC), a Chinese state-owned enterprise. Meanwhile, smart cities are emerging as a significant trend in the construction industry.

Economic development and retail activities are integral to the market, with developers focusing on creating vibrant and sustainable communities. Civil engineering plays a crucial role in the development of infrastructure, including roads, bridges, and water supply systems. Climate change is a pressing concern, and the construction industry is responding by incorporating green and energy-efficient practices into their projects. Sustainability regulations are becoming increasi

The UK residential building construction industry, valued at approximately £185.55 million in 2025, is projected to experience moderate growth, with a Compound Annual Growth Rate (CAGR) of 2.26% from 2025 to 2033. This growth is fueled by several factors. Increased urbanization and population growth in key cities like London, Birmingham, Glasgow, and Liverpool are driving demand for new housing, particularly within the villas and landed houses, and condominiums and apartments segments. Government initiatives aimed at addressing housing shortages and improving infrastructure also contribute positively. However, the market faces constraints including fluctuating material costs, skilled labor shortages, and potential economic downturns which could impact investment and consumer confidence. The industry is highly competitive, with major players such as Willmott Dixon Holdings, Mace, Skanska UK, and Balfour Beatty vying for market share. These companies leverage expertise in project management, sustainable construction practices, and innovative technologies to remain competitive. The geographical distribution of projects varies, with London and other major cities expected to dominate, but regional growth will be influenced by local economic conditions and availability of land. The industry's future trajectory will depend on addressing these challenges effectively while capitalizing on the opportunities presented by population growth and government support. The construction sector's performance is closely tied to broader economic health. Interest rate fluctuations and changes in mortgage availability directly influence consumer purchasing power, impacting housing demand. Environmental regulations and a growing emphasis on sustainable building practices are reshaping the industry, promoting the adoption of eco-friendly materials and energy-efficient designs. This trend aligns with broader societal concerns regarding climate change and resource management, impacting material sourcing and project specifications. Competition is likely to intensify as established firms consolidate and new entrants emerge, particularly those specializing in sustainable and technological innovations. Strategic partnerships and mergers and acquisitions will play a significant role in shaping the competitive landscape, leading to increased efficiency and potentially improved capacity to manage the industry's challenges and capitalize on its growth opportunities. Recent developments include: December 2022: 375 low-carbon rental homes are delivered as part of a historic restoration project for Bristol City Center through public-private partnerships., December 2022: As the One Sydney Harbour residential building from Lendlease celebrates a critical milestone of "topping out" of Residences One, marking the completion of the highest structural point of the 72-story tower, it has secured more than $3.7 billion in sales over its three towers.. Key drivers for this market are: 4., Growth in Commercial Activities and Increased Competition4.; Increasing Demand for Affordable Housing Units. Potential restraints include: 4., Lack of Housing Spaces and Mortgage Regulation can Create Challenges. Notable trends are: Government mandates pertaining to Energy Efficiency.

Contractors required to provide ancillary civil engineering solutions have been impacted by trends in the wider construction sector in recent years. Following a period of robust growth, decaying housebuilding activity has had a knock-on effect on demand for enabling works. Along with the impact of economic uncertainty on commercial construction markets, this has offset the impact of government infrastructure investment to spur a contraction in revenue. Over the five years through 2024-25, contractors' revenue is forecast to tumble at a compound annual rate of 2.2% to £40.1 billion. Following a slump in revenue and profitability during the pandemic, work rebounded to drive strong revenue growth in 2021-22. This was aided by renewed infrastructure stimulus to get spades back in the ground and the release of pent-up demand following intermittent lockdowns. Ongoing supply chain disruption and soaring input costs throughout the construction sector have maintained cash flow difficulties. The wider economic slowdown and subdued housing market conditions has hit new orders, as downstream clients have displayed a degree of risk aversion. Revenue is forecast to decline by 4.1% in 2024-25. Revenue is forecast to climb at a compound annual rate of 0.9% to reach £42 billion over the five years through 2029-30. Housebuilding activity is forecast to remain subdued in the short term, as high borrowing costs and unfavourable economic conditions encourage investors to steer clear of the housing market. However, planning reform introduced by the government in pursuit of lofty housebuilding targets is intended to lead to new housing developments in the medium-term, boosting demand for enabling works. Private and public sector infrastructure investment is set to be increasingly geared towards the UK’s net zero agenda in the coming years, with the expansion of offshore wind farms set to drive demand for marine and coastal construction.

Building contractors and developers depend on various socio-economic factors, including property values, underlying sentiment in the housing market, the degree of optimism among downstream businesses and credit conditions. All of these drivers typically track in line with economic sentiment, with recent economic shocks spurring a difficult period for building contractors and developers. Nonetheless, the enduring need for building services, particularly to tackle housing shortages across the continent, ensures a strong foundation of work. Revenue is forecast to grow at a compound annual rate of 2.3% to reach €1.3 trillion over the five years through 2025. Operational and supply chain disruption caused by the pandemic reversed the fortunes of building contractors and developers in 2020, as on-site activity tumbled and downstream clients either cancelled, froze or scaled back investment plans. Aided by the release of pent-up demand and supportive government policy, building construction output rebounded in 2021. Excess demand for key raw materials led to extended lead times during this period, while input costs recorded a further surge as a result of the effects of rapidly climbing energy prices following Russia’s invasion of Ukraine. Soaring construction costs and the impact of interest rate hikes on both the housing market and investor sentiment led to a renewed slowdown in building construction activity across the continent. However, falling inflation and the start of an interest rate cutting cycle have spurred signs of a recovery in new work volumes, supporting anticipated revenue growth of 2.3% in 2025. Revenue is forecast to increase at a compound annual rate of 6.7% to €1.7 trillion over the five years through 2030. Activity is set to remain sluggish in the medium term, as weak economic growth and uncertainty surrounding the impact of the volatile global tariff environment on inflation and borrowing costs continue to weigh on investor sentiment. Contractors and developers will increasingly rely on public sector support, including measures to boost the supply of new housing, as countries seek to tackle severe housing shortages. Meanwhile, the introduction of more stringent sustainability requirements will drive demand for energy retrofits.

Graph and download economic data for Infra-Annual Labor Statistics: Employment: Economic Activity: Industry (Except Construction): Total for United Kingdom (LFEAINTTGBQ647S) from Q1 1997 to Q4 2020 about United Kingdom, construction, employment, and industry.

United Kingdom Construction Output Val: SE: CT: NW: Other: Private Industrial data was reported at 185.972 GBP mn in Jun 2018. This records an increase from the previous number of 150.727 GBP mn for Mar 2018. United Kingdom Construction Output Val: SE: CT: NW: Other: Private Industrial data is updated quarterly, averaging 126.915 GBP mn from Mar 1980 (Median) to Jun 2018, with 154 observations. The data reached an all-time high of 217.000 GBP mn in Mar 2004 and a record low of 65.000 GBP mn in Mar 1993. United Kingdom Construction Output Val: SE: CT: NW: Other: Private Industrial data remains active status in CEIC and is reported by Office for National Statistics. The data is categorized under Global Database’s United Kingdom – Table UK.EA028: Construction Output Value: By Region.

As of May 2025, UK construction output as measured by gross value added was *** percent larger than it was in 2022, while services output has grown by ***** percent, and agriculture by *** percent. By comparison, production output has fallen by ****percent.

United Kingdom Construction Output Val: EE: CT: NW: Other: Private Industrial data was reported at 112.016 GBP mn in Jun 2018. This records a decrease from the previous number of 119.025 GBP mn for Mar 2018. United Kingdom Construction Output Val: EE: CT: NW: Other: Private Industrial data is updated quarterly, averaging 91.500 GBP mn from Mar 1980 (Median) to Jun 2018, with 154 observations. The data reached an all-time high of 198.000 GBP mn in Mar 2007 and a record low of 46.000 GBP mn in Jun 1983. United Kingdom Construction Output Val: EE: CT: NW: Other: Private Industrial data remains active status in CEIC and is reported by Office for National Statistics. The data is categorized under Global Database’s United Kingdom – Table UK.EA028: Construction Output Value: By Region.

Residential building contractors are contingent on the propensity of property developers to invest in new ventures; movements in property prices; government schemes intended to boost the housing supply; and underlying sentiment in the housing market. Industry contractors have endured turbulent operating conditions over the past five years, leading to volatile shifts in revenue and profitability. Revenue is forecast to grow at a compound annual rate of 1% over the five years through 2024-25, reaching £97.4 billion. The pandemic caused a significant drop in output in 2020-21, as restrictions placed on on-site activity and fewer enquiries for new housing units reduced revenue opportunities. Aided by government support for the housing market and the release of pent-up demand, 2021-22 was characterised by a strong rebound in activity, though materials and labour shortages maintained constraints on output. Mounting supply chain disruption and heightened economic uncertainty maintained pressure on output in the following year, though revenue growth was maintained by growth in average selling prices. Interest rate hikes and inflationary pressures led to a more subdued housing market in 2022-23, holding back the number of housing starts and completions during the year. This was followed by a slump in new residential building construction in the following year, as high borrowing costs and uncertain market conditions caused developers to scale back investment plans. Revenue is set to grow by 1.5% in 2024-25, aided by a slight improvement in new orders for residential building construction and an uptick in average selling prices. Revenue is slated to climb at a compound annual rate of 1.5% to reach £105.1 billion over the five years through 2029-30. Housebuilding activity is set to grow in the medium-term, aided by the release of pent-up demand. Nonetheless, significant uncertainty remains, with mortgage rates likely to settle well-above pre-pandemic levels and supply chains remaining fragile. The new government’s pledge to deliver 1.5 million houses during the first five years of parliament will boost demand for industry contractors, though the full impact of this on growth prospects is dependent on the nature and extent of accompanying funding plans.

The construction output price in the United Kingdom has reached an annual growth rate of two percent in September 2024. Construction costs have been increasing at a lower rate than in 2022 and 2023. The year-over-year growth rate reached over 10 percent in May and June of 2022. Public and private housing was the construction segment with the highest output price increase. How have material costs developed over the years? Several factors influence construction material costs, including supply and demand, regulatory requirements, and transportation logistics. Manufacturing efficiency and global trade policies also play a big part, along with economic factors like inflation and currency fluctuations. In June 2022, the price of construction materials for new houses in the UK were 53 percent higher than in 2015. What is the largest component of those costs? Labor costs are often one of the largest expenses in construction projects. That is due to the skilled nature of the work, which has a high demand for specialized trades. The construction sector's labor costs accounted for around 58 percent of the sector's earnings in the United Kingdom in 2023. In the past years, the size of labor costs as a share of the construction sector rose by more than three percentage points, indicating that labor costs have increased at a faster rate than the overall revenue of the industry.

United Kingdom Bank Lending: UR: GBP: LR: Construction data was reported at 31,942.000 GBP mn in Sep 2018. This records a decrease from the previous number of 32,584.000 GBP mn for Jun 2018. United Kingdom Bank Lending: UR: GBP: LR: Construction data is updated quarterly, averaging 15,399.000 GBP mn from Dec 1986 (Median) to Sep 2018, with 128 observations. The data reached an all-time high of 55,015.000 GBP mn in Mar 2011 and a record low of 5,253.000 GBP mn in Dec 1986. United Kingdom Bank Lending: UR: GBP: LR: Construction data remains active status in CEIC and is reported by Bank of England. The data is categorized under Global Database’s United Kingdom – Table UK.KB009: Bank Lending to UK Residents: By Industries: GBP: Long Run.

Graph and download economic data for Infra-Annual Labor Statistics: Employment: Economic Activity: Industry (Except Construction): Total for United Kingdom (LFEAINTTGBQ647N) from Q1 1997 to Q1 2025 about United Kingdom, construction, employment, and industry.