The latest Glenigan UK construction forecast is predicting a 24% surge in project starts by 2027.
Drawing on extensive construction data and market intelligence, the report offers a detailed look at what’s ahead for the sector and signals a much-needed turnaround after a challenging 2024.
Private housing starts have already shown marked improvement during the first four months of 2025, bolstered by more favourable market conditions. Encouragingly, the housing market is forecast to strengthen considerably during the latter half of 2025 and throughout 2026, driven by rising household incomes, reduced mortgage rates and improving economic conditions.
Recovery across private non-residential sectors is underway:
The industrial construction sector is one of the stronger performers, projected to resume growth from 2025, primarily driven by increasing demand for logistics space as rising consumer spending boosts requirements from online retailers and third-party carriers.
Retail construction faces a more gradual recovery path, with near-term challenges from National Insurance increases and minimum wage rises creating cost pressures for retailers. While an excess of vacant retail premises will likely constrain new developments, opportunities exist in repurposing existing spaces into mixed-use locations, with discount supermarkets Aldi and Lidl remaining notable expansion bright spots.
The office sector is forecast to return to growth as financing conditions improve. This follows a 16% decline in starts last year, amid higher borrowing costs and surplus floorspace. This has been prompted by increasing office refurbishment work, as premises are remodelled for hybrid working. Likewise, environmental performance requirements will generate demand for retrofit and new build projects throughout the forecast period.
Industry expert sees cause for optimism
“The industry has faced a series of frustrating years, but we’re finally turning a corner. Consumer confidence is returning, the Government is investing strategically, and conditions are right for a rebound.”
— Allan Wilen, Economic Director, Glenigan
While Glenigan acknowledges risks from global economic shifts, the outlook is positive. With policy, investment and consumer trends aligning, the next three years look significantly brighter for the construction sector.
