Total construction output grew by 0.3% in the three months to August 2025, according to the latest figures from the Office for National Statistics (ONS), reflecting a modest improvement despite continued volatility across the wider construction industry. Over the same period, UK GDP also increased slightly, suggesting that while growth remains limited, the overall economy continues to hold steady.
The ONS reported that construction output rose by 0.3% in the three months to August, driven by growth in repair and maintenance work, which increased by 1.3%. Within that, private housing repair and maintenance was the strongest performer, rising by 5.6%. However, new work fell by 0.4% over the same period, and five of the nine construction sectors recorded growth.
The monthly figures painted a more subdued picture. Construction output fell by 0.3% in August, following zero growth in July, revised down from the previously estimated 0.2% rise. The decline came solely from a 1.5% fall in repair and maintenance, as new work increased by 0.5%. Overall, the figures highlight the fragile balance in activity levels across the sector, with modest gains offset by weakness in specific areas.
Across the wider economy, GDP grew by 0.3% in the three months to August compared with the three months to May, up from 0.2% in the previous period. Services output grew by 0.4%, while production output fell by 0.3%. Monthly GDP rose by just 0.1% in August, following a 0.1% decline in July and 0.4% growth in June. While production increased by 0.4% in August, both services and construction showed weaker performance.
The latest S&P Global/CIPS UK Construction Purchasing Managers’ Index (PMI) for September indicated that activity remains in contraction, though at a slower pace. The index rose to 46.2 from 45.5 in August, signalling the slowest rate of decline in three months. Residential building work showed some improvement, while commercial construction was the only category to register a further decrease. Civil engineering remained the weakest segment. Respondents cited subdued demand, a lack of new project starts and client hesitancy as key factors behind the ongoing slowdown. Order books declined for the ninth consecutive month and employment also fell, although some firms reported recruiting apprentices.
Input buying continued to fall, leading to shorter lead times and improved supply conditions. However, price inflation edged higher compared to August, with firms reporting increased costs for energy, transport and raw materials. Confidence across the industry remained low, with expectations for the year ahead at their second-lowest level since December 2022. Some companies highlighted potential opportunities in infrastructure and energy projects, but these were tempered by uncertainty over the economic outlook and the forthcoming Autumn Budget.
The Department for Business and Trade’s Monthly Statistics of Building Materials and Components showed further evidence of mixed performance across the supply chain. Deliveries of bricks were down 5.2% in August compared with the same month last year, while block deliveries rose by 2.7%. Meanwhile, the Builders Merchant Building Index reported that total merchant value sales in July 2025 were 0.1% higher than a year earlier, with volume sales up 0.6% and prices down 0.6%. Compared to June, sales rose 5.8%, though when adjusted for the number of trading days, like-for-like value sales fell by 3.4%.
Looking ahead, forecasts from Experian and the Construction Products Association (CPA) point to gradual recovery. Experian predicts total construction output will rise by 2.1% in 2025, followed by 3.4% in 2026 and 4.3% in 2027. The CPA expects growth of 1.9% in 2025 and 3.7% in 2026, led by private housing and repair, maintenance and improvement work.
Overall, the latest data points to an industry still struggling with weak demand and subdued confidence, but with a tentative indication of improvement in certain segments. While the medium-term outlook suggests a slow return to growth, current conditions remain uncertain, with momentum in construction still fragile as 2025 draws to a close.
