The May edition of Glenigan’s Construction Review shows that project starts rose by a third in the three months to April compared with the previous three months, and showed a 29% improvement over April’s Review.
The uptick was mainly due to a tentative improvement in underlying starts in key sectors such as house-building, said Glenigan.
But Glenigan notes that the general economic consensus predicts that any upturn is likely to be short-term as market volatility continues.
Despite the recent improvement in project starts, there has been a 17% overall reduction in activity compared to the same period in 2024, with the lack of major projects dragging down an otherwise encouraging level of growth.
Glenigan said that this shows the sector is “still battling against a tide of political indecisiveness and economic uncertainty, particularly when it comes to public sector funding for critical infrastructure.”
When it comes to contract awards, there was a 29% decline during the three months to the end of April – also down 10% on the same period last year.
The Review shows that detailed planning permissions rose sharply in the period to the end of April – up 51% compared with the previous three-month period and up 52% on the same period last year.
But this uptick was the result of just one project: the much anticipated Lower Thames Crossing, which finally secured development consent in March 2025. When the contribution of this project is excluded, underlying planning approvals, which make up the majority of construction activity, posted weak results, falling against both the preceding three months and last year.
Glenigan economic director Allan Wilen, said: “The results are superficially impressive, but a closer look reveals a sector still struggling to re-establish its foothold. It’s hardly surprising. UK construction is continuing to adjust to mercurial market conditions, sometimes having to respond in the moment to the constantly shifting international and domestic economic landscape.
“Particularly, higher operational costs, likely to keep rising in the near future, mean clients are delaying investment decisions. Likewise, contractors are lukewarm to putting shovels in the ground right now when funding is not forthcoming.
He added: “There’s no denying US tariff policy has definitely exacerbated the uncertainty. However, steps to de-escalate trade tensions may go some way to improving the current situation, with steps like the US-UK tariff deal going some way to improving confidence over the coming months. Furthermore, the Government clearly setting out its strategic store will also help to boost momentum as more promised public works are greenlit.”
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