As someone who spends their days deep in the details of underground utility searches, I keep a close eye on what’s happening above ground, too. And in 2025, the UK construction industry is in a fascinating place: pushing ahead in some areas, struggling in others, and adopting new technology at a pace we haven’t seen before.
Here’s my take on where things stand, where they’re headed, and why it matters – especially if, like us at Cornerstone Projects, you’re involved in making sites safer and smarter from the ground up.
A resilient industry with pockets of growth
Despite ongoing economic challenges, the UK construction sector has shown some real resilience this year.
According to the ONS, construction output grew by 0.9% in April 2025 – the third consecutive monthly increase – with infrastructure and private housing repair leading the way. It’s modest, but meaningful.
Forecasts from the Construction Products Association predict overall growth of 2.1% this year, and 4.0% in 2026. The private housing sector is expected to see a 6% increase in 2025 alone, rising to 8% in 2026.
That’s no small feat, especially given the headwinds the industry has faced.
Government spending continues to be a key driver. Ministers recently set out plans to invest a staggering £725 billion in UK infrastructure over the next decade. Whether that’s road improvements, rail enhancements, or renewable energy upgrades, this is long-term commitment that will shape the built environment – and provide steady demand for utility searches like ours to ensure those sites are developed safely.
Key challenges facing the industry
Of course, it’s not all smooth sailing. The industry continues to grapple with several major challenges, the most pressing of which is the well-publicised skills shortage.
The UK Government has pledged £600 million to train 60,000 new construction workers by 2029, with the aim of addressing critical gaps in bricklaying, carpentry, plumbing, and electrical work. That’s welcome news, but it’s clear more needs to be done.
According to the Federation of Master Builders, 42% of small building firms reported job delays in late 2024 due to skills shortages. This shortage is having a direct impact on workloads, while nearly a quarter of firms also reported a decline in staff numbers, highlighting a sector still under pressure to attract and retain qualified tradespeople.
Another ongoing issue is planning, or rather the lack of progress in streamlining it.
A recent report found that London saw just 3,990 housing starts in 2024-25, with only 298 private homes begun in Q2 of this year. The Government may have set an ambitious target of 305,000 homes per year by 2030, but unless planning bottlenecks are addressed, it’s hard to see how that target becomes a reality.
Costs & supply chain pressures
Material price volatility has eased when compared to the peak of 2022-23, but costs remain unpredictable.
In April 2025, the all-work construction price index was actually down 0.9% year-on-year, while repair and maintenance rose slightly by 1%. That said, project planning still requires caution, as supply chain instability continues to affect specialist components and imported materials.
When you factor in permit timelines, health and safety obligations, and environmental considerations, even small material delays can compound quickly.
Retrofit and green tech in the spotlight
The industry’s shift toward decarbonisation has continued in 2025, with retrofitting existing homes a top priority – and rightly so. The UK’s housing stock is among the oldest in Europe, and bringing it up to modern efficiency standards is vital.
The Great British Insulation Scheme, with its £1 billion budget, aims to treat 315,000 homes by 2026. But to hit long-term climate goals, the country needs to train around 230,000 additional retrofit professionals by 2030. That’s a tall order, and one that highlights how training and tech must go hand-in-hand.
On the tech side, modular construction, low-carbon concrete, and sustainable materials like timber frames and hempcrete are becoming more common. More firms are adopting circular design principles, building with end-of-life reuse in mind.
AI, BIM, and digital twins
Technology is transforming construction, and 2025 is seeing real momentum.
AI is now being used for project scheduling, cost forecasting, and even risk management. Building Information Modelling (BIM) is evolving into digital twin technology, providing real time, virtual representations of buildings and infrastructure to monitor performance and lifespan.
Drones, AR/VR walkthroughs, and automated surveying tools are helping contractors cut time on site and reduce human error.
At Cornerstone Projects, we’ve embraced this fully – offering our clients high-resolution underground utility maps delivered in accessible PDF and CAD formats, compatible with leading design and project management tools.
It’s not just about knowing what’s underground, it’s about making that knowledge work for your whole project.
Regulation & risk
Tighter safety regulations are also driving change.
Post-Grenfell, the Building Safety Act has made accountability a major focus, with mandatory digital records and stricter oversight. Developers and contractors need to demonstrate compliance throughout the lifecycle of a build, and that includes showing due diligence when it comes to underground risks.
So, what’s next?
With all that said, what does the future hold? In many ways, the next 18-24 months will be defined by how well the industry balances innovation with regulation, and ambition with practicality.
We’re expecting to see even more collaboration across the supply chain. From the earliest feasibility studies – including utility searches – through to post-completion monitoring, integration is key. And with climate resilience becoming a higher priority (flood resistance, heat mitigation, sustainable drainage), early-stage data is only becoming more valuable.
At Cornerstone Projects, we’re optimistic. Construction in the UK might not be booming right now, but it’s certainly evolving. And for those willing to adapt, there’s plenty of opportunity beneath the surface – literally and figuratively.
But what are your thoughts? How is UK construction faring in 2025 in your eyes? If you’d like to get involved in the conversation, please share this article on social media and tag our company LinkedIn page.
If you’re planning a construction project and need to know exactly what’s underground before you start, get in touch with us. We’re here to help you build smarter, safer, and more efficiently.
Brought in to help take the business to the next level! His role is to improve lead generation and customer satisfaction from over 7,000 registered clients. Jim loves interacting with potential and existing clients and has a wealth of marketing and sales experience through his previous roles at O2, the RAC and TalkTalk. Jim holds a BA (Hons) Business Studies degree majoring in Marketing. A season ticket holder at Liverpool FC and a keen golfer, Jim also loves the gym!