Project-starts have dropped in the wake of the first month of export disruptions caused by the Trump administration
The Glenigan April 2025 report records construction industry statistics in the three months to the end of March 2025.
The statistics show that project-starts are down by 4% from the previous three months, and down by a whole 21% on a yearly basis.
The review focuses on major and underlying projects
Major projects are all projects worth >£100m, with underlying projects (<£100m) being seasonally adjusted.
The value of work commencing on-site is still dropping due to delays in major developments, causing a drop in confidence in underlying schemes.
Major projects are still thin on the ground, contributing majorly to the low number of starts. Underlying schemes also underperformed, with declines both quarter-on-quarter and year-on-year.
Community and Amenity projects performed better in main contract awards, with a 26% growth year-on-year, and a stronger 70% growth quarter-on-quarter. Still, much of the reported pipeline has not yet translated to starts on-site.
Some good news for planning approvals, as they rose by 8% from the previous three months, and growth mostly being seen in the industrial, health, hotel & leisure, and education sectors. Overall civil engineering planning approvals saw a large quarterly increase of 176%.
Hotel & leisure approvals saw a 20% yearly rise thanks to further investment in hospitality, while education also saw a 17% yearly rise thanks to a 21% capital funding uplift in the Department of Education’s 2025/26 budget.
US tariffs loom large over the Glenigan April 2025 report
A challenge is being presented to the sector, as many UK building materials, along with all UK goods, are undergoing a US tariff of 10%, with aluminium and steel seeing a tariff of 25%.
Aluminium and steel made up 12% of the total construction material export in 2023, and most exports consist of manufactured components, meaning UK producers will feel the pinch more than raw material providers.
Another trade decline, similar to that seen in Brexit, could cause the industry to lose £130m.
As most global suppliers are also seeing tariffs from the US, many are likely to move more of their trade to the UK and Europe. This increases the risk of oversupply and price volatility, and contractors, specifiers, and manufacturers should monitor cost movements and safeguard market share.
Allan Wilen, economics director at Glenigan, said: “The sharp drop in project-starts reflects the ongoing struggles within the industry. While the surge in major contract awards and detailed planning approvals suggests a strengthening pipeline, real, sustained growth hinges on improved market confidence and the smooth conversion of approvals into on-site activity. The Spring Statement’s 13% increase in departmental capital budgets for 2025/26, particularly in housing, health, and education, is a welcome boost for future workloads.”
Sean Keyes, CEO of Sutcliffe, said: “With the global steel industry facing ongoing pressures and slow demand after years of turmoil, Donald Trump’s 25% tariff on UK steel presents a significant hurdle for Labour’s plans to grow the economy as this will surely, albeit temporarily slow down demand for UK steel work for customers of British steel in the US. Whether this damages the construction industry in the UK and impacts the ambitious goal of constructing 1.5 million homes by the end of Labour’s initial term is uncertain and unwelcome.
“This may push up steel work costs in the UK. Despite my long standing view that building 1.5 million homes in five years is overly ambitious—with a more realistic goal of constructing 300,000 homes in a single year—this new tariff only creates a further barrier to the existing shortfall. By driving up construction costs and potentially delaying critical housing projects, it makes an already unrealistic target even more unattainable. Alongside existing challenges such as planning regulations, limited land availability, and a shortage of skilled labour, these tariffs threaten to strain the UK’s historic special relationship with the US and further harm an already struggling steel industry here in the UK, only now its impact will be felt even more widely at home.”
