Fourth quarter output down 2.1%: delivery and cost pressures for UK project teams
Reviewed by Tom Sullivan
First reported on The Construction Index
30 Second Briefing
Fourth quarter construction output in Great Britain fell 2.1% quarter‑on‑quarter in Q4 2025, with new work down 2.6% and repair & maintenance down 1.5%, driven by a 3.6% drop in private house‑building. Despite this, annual output for 2025 still grew 1.8% versus 2024, while construction output prices rose 2.7% in the 12 months to December. New orders declined 3.8% (£469m) in Q4, mainly in private commercial and industrial work, as developers cited low planning approvals, rising costs and mounting viability pressures, particularly for SMEs.
Technical Brief
- December 2025 output fell 0.5% month‑on‑month, following revised drops of 0.8% and 1.6% in November and October.
- December’s decline came entirely from a 2.5% fall in repair and maintenance, with new work up 1.0%.
- Construction output prices increased 2.7% in the 12 months to December 2025, squeezing fixed‑price contracts.
- Total new orders dropped £469m in Q4 2025, driven mainly by private commercial and private industrial sectors.
- UK real GDP grew only 0.1% in both Q3 and Q4 2025, limiting demand for new private developments.
- Home Builders Federation reports mounting scheme viability pressures from low planning approvals, rising costs and policy burdens.
- Hampshire Trust Bank notes SMEs are disproportionately exposed, as planning delays directly constrain cash flow and site turnover.
Our Take
With UK GDP only edging up 0.1% quarter-on-quarter while construction output prices are rising 2.7% annually, contractors in Great Britain are likely seeing margin squeeze on fixed-price infrastructure and building contracts signed in 2023–24.
The £469 million fall in UK construction new orders in Q4 2025 signals a potential soft patch for project pipelines in 2026–27, which in our infrastructure coverage typically translates into fiercer bidding and delayed starts on discretionary private-sector schemes.
Among the 685 Infrastructure stories in our database, UK-focused pieces increasingly pair ONS data with commentary from lenders such as Hampshire Trust Bank and trade bodies like the Home Builders Federation, indicating that financing conditions and planning policy are now central to interpreting construction output figures.
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.
