We’ve been getting our serious (hard) hats on, and have studied the findings of The UK Construction Market Size, Trends, and Forecasts by Sector – Commercial, Industrial, Infrastructure, Energy and Utilities, Institutional and Residential Market Analysis to 2029 (Q2 2025). Phew, that’s quite a title isn’t it and the report is pretty heavy too. Lucky for you we have broken it down for you.
Overall, as those who work in the construction industry will know, realistically we continue to face some unique and complex challenges, from regulatory delays to shifting economic landscapes.
While recent policy developments offer some promise, data indicates that we’re at an interesting turning point.
What does the report cover?
Industry Overview & Forecasts (2020–2029)
The report offers historical data from 2020 to 2024 and detailed forecasts from 2025 to 2029, highlighting key drivers behind market growth in our industry. It covers commercial, industrial, infrastructure, energy & utilities, institutional and residential sectors.
Growth Projections
The report projects 1.6% real growth in the UK construction industry in 2025, helped by rising construction orders and increased investment in data centres and renewable energy.
It also discusses government investment and ‘Mega-Projects’, including a substantial £10 billion commitment to road infrastructure for 2025–2026, covering strategic and local road maintenance and renewals along with a £13.2 billion AI-driven data centre development plan.
Why did we take the time to read it?
This report is a robust resource for:
- Assessing sector-by-sector performance across construction markets.
- Understanding how government spending, especially on infrastructure and tech (like AI data centres), is shaping momentum.
- Evaluating long-term market trends and investment opportunities up to 2029.
- Because we love to stay ahead of the curve.
Our main takeaways
If you don’t have the time, or the inclination to read the whole report, don’t worry. These are the main points that we think you need to know.
The Building Safety Act and Planning Delays
The Building Safety Act was designed to improve safety standards and accountability across the housing sector. However, it also introduced delays that slowed planning and development. Recent easing of these delays has been welcomed by industry stakeholders, but experts caution that the full impact will take time to emerge. Faster planning is an encouraging sign, yet it does not automatically guarantee new housing supply. Developers will remain cautious if market demand appears weak or uncertain.
Market Outlook: Slow but Steady Growth
According to a Research and Markets report, the UK construction industry is expected to grow 1.6% in real terms in 2025, supported by rising orders and strong investment in data centers, renewables, and infrastructure, including a £10 billion road improvement initiative and significant AI-related data center projects worth £13.2 billion.
Looking further ahead, forecasts suggest a 3.3% average annual growth from 2026 to 2029. Another estimate projects the UK construction market at USD 411.40 billion in 2025, growing to USD 481.34 billion by 2030, reflecting a 3.19% compound annual growth rate (CAGR).
These figures signal cautious optimism, especially with infrastructure and industrial investment acting as key drivers.
It is worth noting at this point that Reuters reports that the UK construction sector has entered its eighth consecutive month of contraction, marking the longest downturn since 2020. Although the S&P Global Construction PMI ticked up slightly to 45.5 in August which is encouraging, it remains well below the 50-growth threshold. The decline remains stubborn, primarily due to continued weakness in both housing and civil engineering sectors.
Whilst this doesn’t come to a huge surprise to us as plant hire experts, it does underscore the need for immediate, targeted support.
Even with long-term projected growth, the current crisis requires more than planning reform; it requires tangible intervention. Without clearer signals of demand, developers are unlikely to resume large-scale projects.
Rockthorn director Stuart observes:
“The easing of delays caused by the Building Safety Act is beginning to take effect, but the full benefits have yet to materialise. Streamlining the planning process is a step in the right direction, yet confidence across the housing market remains fragile. Developers will not bring forward supply if they believe homes will sit unsold.
At the same time, the UK’s renegotiated trade deal with the United States has reduced the projected economic impact from £10.8 billion to £4.3 billion. While this is an improvement, the scale of the shortfall is still considerable and will be felt across multiple sectors. For construction in particular, already facing mounting pressures, this represents another layer of challenge.”
The Road Ahead
While the report provides some confidence in order for housing delivery and confidence to rebound, policy must be decisive, sustained and aligned with market realities. Stuart’s analysis underscores the urgent need for:
- Targeted government interventions, such as tackling housing demand and offering developer incentives
- Skill development programmes, building capacity and preventing workforce shortages
- Accelerated planning reforms that build confidence, not just ease bottlenecks
So from Stuart the message is clear “Government intervention must go beyond headline announcements. Proactive, targeted support for business and for the construction industry in particular is critical to stabilising confidence and sustaining growth. Construction is a cornerstone of the UK economy, driving growth, jobs and housing supply, so one thing I am certain of is that Rockthorn will keep turning up, to support the industry.”