Autumn construction slowdown: what budget jitters mean for UK project teams
Reviewed by Joe Ashwell
First reported on The Construction Index
30 Second Briefing
UK construction output fell 1.3% in November 2025 after a 1.2% drop in October, with ONS data showing new work down 1.9% and repair and maintenance down 0.4% amid client hesitation ahead of the autumn budget. Over the three months to November, output declined 1.1%, the sharpest three‑month fall since March 2023, driven mainly by a 3.7% contraction in private housing repair and maintenance. Aecom managing director Jo Streeten expects easing inflation and further interest rate cuts to unlock shelved projects from early 2026 despite GDP growing 0.3% in November.
Technical Brief
- ONS identifies four of nine construction sectors contracting over the three months to November 2025.
- Private housing repair and maintenance is the largest drag, with a 3.7% three‑month contraction.
- New work shrank 1.0% over the same three‑month period, matching the 1.1% fall in repair and maintenance.
- October’s output figure was revised downwards, tightening month‑on‑month comparisons for contractors tracking workload.
- ONS cites anecdotal evidence of project delays and reduced client spend linked to pre‑budget uncertainty.
- Aecom’s Jo Streeten reports clients and developers “hesitating before committing to new projects”, stalling pipelines.
- Despite sector weakness, UK GDP still grew 0.3% in November and 0.1% over the three‑month period, suggesting construction‑specific, not economy‑wide, constraints.
Our Take
With four of nine UK construction sectors in decline over the three months to November 2025, contractors on long-duration infrastructure frameworks are likely to face sharper competition on price as firms chase a smaller pool of active work.
The combination of flat GDP growth over the quarter and only marginal construction output growth suggests public-sector clients may delay notice-to-proceed on larger UK schemes until post-budget clarity, pushing more risk onto contractors’ cash flow planning.
Across our 443 Infrastructure stories, the UK appears frequently as a market where ONS data are used as de facto benchmarks in contract escalation clauses, so this 0.3% monthly GDP and output movement will feed directly into how some NEC and PPP payment mechanisms are indexed for 2025–26.
Prepared by collating external sources, AI-assisted tools, and Geomechanics.io’s proprietary mining database, then reviewed for technical accuracy & edited by our geotechnical team.
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