The Royal Institution of Chartered Surveyors (RICS) has released its Q1 2025 UK Construction Monitor workload survey, indicating that construction workloads remain largely stable, with signs pointing to infrastructure work creating modest growth in the year ahead.
According to the survey, the overall headline net balance for workloads stayed neutral at minus 1%, mirroring the previous quarter’s reading. Infrastructure continues to lead the sector posting a strong net balance of +13%, with the energy sub-sector maintaining momentum at +35%.
Despite the steady outlook for workloads, financial challenges persist. Credit conditions weakened over the quarter, reporting a net balance of -21%. Financial constraints remain the most significant barrier, cited by 63% of respondents, followed closely by regulatory and planning issues.
Government actions on planning reform have yet to have an impact; many respondents aired frustrations at work being held back by red tape. Some respondents mentioned a “brain drain” to the Middle East and North America, with a shortage of skills and labour continued to impact projects.
Expectations for the next 12 months remain positive but have been slightly scaled back, with a net balance of +17% expecting growth in activity. Infrastructure is projected to lead sector growth (+32%), while private residential and non-residential sectors are also expected to see some improvement. However, profit margin expectations have worsened for the third consecutive quarter, falling to -12%.
Employment prospects offer a bright spot, with hiring expectations holding steady at a net balance of +15% over the next year.
RICS chief economist Simon Rubinsohn said: “Construction activity was largely flat over the quarter with respondents expressing a little more caution in the face of the heightened level uncertainty both at a global and domestic level. In particular, concerns about the implementation of tariffs and what this might mean for costs and economic activity as well as the potential impact of the uplift in employer NI contributions are highlighted in the feedback.
“Significantly, aside from financial issues the most cited obstacle to activity referenced in the survey is planning and regulation which chimes neatly with the government’s agenda. Addressing this issue is critical if the ambitions around housing and infrastructure are to be met.
“That said, for now the forward-looking metrics point to a relatively modest uplift in construction workloads over the next 12 months with profitability in the sector remaining under pressure.”
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