Construction Industry Statistics UK 2026

The UK construction industry produced output worth £142 billion in 2024, a figure that has barely moved in two years, yet remains one of the most strategically important sectors in the economy, accounting for roughly 6% of GDP and employing more than 2 million people. Annual output grew by 1.8% in 2025, the fifth consecutive year of expansion, but the sector enters 2026 facing a sharp reversal, with output forecast to contract by 2.5% in 2026, the steepest downward revision since the 2022 energy price shock. This article compiles the most current and authoritative data across output, employment, housing, insolvencies, costs, skills, sustainability and technology to give a comprehensive picture of where the UK construction industry stands today.

Report Highlights

• UK construction output is forecast to contract 2.5% in 2026, after 1.8% growth in 2025.
• Construction recorded 3,973 insolvencies in the year to July 2025, 17% of UK corporate insolvencies.
• The UK construction workforce averaged 2.07 million in 2025, down 0.9% year-on-year.
• Private housing output is forecast to fall 7% in 2026; private housing repair and maintenance falls 8%.
• Infrastructure output is forecast to rise 3.2% in 2026 and 3.4% in 2027.
• The UK 10-year infrastructure strategy commits at least £725 billion in public funding to 2035.
• UK construction apprenticeship starts via the New Entrant Support Team rose 43% to 5,913 in 2025-26.
• England added 342,100 homes since July 2024, just 22.8% of the 1.5 million parliamentary target.

Market Size and Output

UK construction output sits near its highest nominal value on record but has plateaued since 2023, with weakening new orders pointing to a softer 2026. The figures below break down recent output, forecast revisions and the forward order book.

Overall Output

Output growth has continued for five straight years but momentum is fading, with quarterly data showing the largest three-month decline since early 2023.

• Annual UK construction output grew 1.8% in 2025 compared with 2024, the fifth consecutive year of annual growth.
• Total construction output in 2024 was valued at £142.2 billion, almost exactly flat on the £142.5 billion recorded in 2023 and just 2.9% higher than in 2022.
• Construction GVA reached £142 billion in 2024, equivalent to roughly 6% of total UK GDP.
• In Q1 2026, total construction output grew 0.4% on Q4 2025, supported by a 3.4% rise in repair and maintenance, while new work fell 1.9%.
• Monthly construction output rose 1.5% in March 2026, the third consecutive monthly increase.
• Annual construction output price growth fell to 0.8% in the 12 months to March 2026, down from 3.0% across full-year 2024.
• In Q4 2025, total output fell 2.1% on Q3 2025, with new work down 2.6% and repair and maintenance down 1.5%.
• Output fell 1.1% over the three months to November 2025, the largest three-month decline since March 2023.

Market Value Forecast

Long-term growth projections remain positive, but near-term forecasts have been revised sharply downward for 2026, with a modest recovery pencilled in for 2027.

• The UK construction market was valued at approximately USD 256.6 billion in 2024 and is forecast to reach USD 388.6 billion by 2034, a CAGR of 4.3%.
• UK construction output is forecast to contract 2.5% in 2026, a sharp downward revision from the 1.7% growth forecast just months earlier in winter 2026.
• The 2026 forecast was first set at 2.8% growth, revised down to 1.7% in January 2026, then to -2.5% in spring 2026, the steepest revision outside the 2008 crisis, 2020 lockdown and 2022 energy shock.
• Output is expected to recover modestly with 1.2% growth in 2027, though downside risks remain heavy.
• Construction output is forecast to grow an average 2.1% per year through to 2029 from a 2025 base.
• Total assets employed in UK construction stood at £206 billion in mid-2025, with a net worth of £96 billion and sector borrowing of £27 billion.

New Orders and Pipeline

New orders are a leading indicator of future workload, and recent quarterly data show a sharp swing from early-2025 strength to early-2026 weakness.

• Total construction new orders rose 26.6% in Q1 2025 compared with Q4 2024, with £11.6 billion of work committed.
• Q1 2025 new orders were 10.5% higher than Q1 2024 on an annual basis.
• Total new orders fell 10.5% (£1.238 billion) in Q1 2026 compared with Q4 2025, signalling a weakening forward pipeline.
• New orders fell 2.4% (£231 million) in Q4 2024 on Q3 2024, driven by a 23.5% fall in infrastructure new work and a 19.7% drop in private industrial new work.
• Total new construction orders were up 12.6% year-on-year in the most recent comparable period.

Sector Breakdown

The 2026 outlook splits sharply by sector, with housing and commercial work contracting while infrastructure expands on the back of major public funding commitments.

Housing

Housing remains the largest single construction sector, but starts and completions have weakened, putting the government's 1.5 million homes target under strain.

• Private housing output is forecast to fall 7.0% in 2026 and remain flat in 2027.
• New private housing represented 17.9% of total UK construction output in 2024.
• Housing and non-housing repair and maintenance together accounted for over 44% of all UK construction output in 2024.
• UK housing starts rose to 37,300 units in Q4 2025, up from 30,320 in Q3 2025, but still below the long-run quarterly average of 42,000 since April 2022.
• An estimated 150,600 housing starts were recorded across the UK in 2025 as a whole.
• Housing completions in England in 2024-25 totalled 199,300, down from 221,070 in 2023-24, against a required annual rate of 370,408 to meet government targets.
• New housing starts fell 28% in 2024-25, creating a significant pipeline gap for completions in subsequent years.
• Private housing repair, maintenance and improvement output is forecast to fall 8.0% in 2026, as homeowners defer spending due to high mortgage rates and the end of ECO4 and ECO+ energy efficiency programmes.

Infrastructure

Infrastructure is the bright spot in the 2026 outlook, underpinned by a multi-decade public funding commitment and a long pipeline of energy, water and rail contracts.

• Infrastructure output is forecast to rise 3.2% in 2026 and 3.4% in 2027, supported by energy, water and rail contracts.
• The UK government's 10-year infrastructure strategy, published in June 2025, commits at least £725 billion in public funding over the coming decade.
• At least £9 billion per year is allocated to maintenance and renewal of health, education and justice estates, rising to over £10 billion per year by 2034-35.
• Hospital infrastructure receives £6 billion per year; schools and colleges £3 billion per year; courts and prisons at least £600 million per year.
• The Spending Review provides £24 billion of capital funding for motorways and local roads between 2026-27 and 2029-30.
• Total departmental capital investment is set to grow 3.6% per year to 2029-30, representing a £113 billion increase versus previous government plans.

Commercial

Commercial construction faces another contraction in 2026, with weak demand for large new-build schemes offset only partially by selective fit-out and refurbishment work.

• Commercial construction output is forecast to fall 3.7% in 2026.
• Annual construction output price growth was just 0.8% in the 12 months to March 2026, well below recent years' elevated rates.

Employment and Workforce

The UK construction workforce has shrunk since the pandemic and is below both its 2019 peak and pre-financial-crisis high, with skills shortages now seen as the sector's most pressing structural constraint.

Workforce Size

Headline employment continues to slide, with diversity figures slowly improving from a low base.

• An average of 2,070,035 people worked in UK construction across 2025, down 0.9% on 2024 and 13.0% below the 2,379,276 workers employed in 2005.
• There were 2,045,781 construction workers in Q4 2025, a 0.3% fall on Q3 2025.
• Q1 2025 construction employment was 340,784 lower than the Q1 2019 peak and 503,060 lower than the pre-financial-crisis peak of Q3 2008.
• Construction employs roughly 7% of the total UK labour force.
• Construction employment has declined 10.8% since the pandemic, with an ageing workforce intensifying the trend.
• Women make up around 15% of the overall UK construction workforce, roughly 340,000 women, but only 1-2% of the manual on-site workforce.
• Women accounted for over 15% of new entrants into construction apprenticeships in 2025, up from under 10% a decade ago.
• BAME employees make up roughly 6% of the construction workforce, compared with around 13.8% of the total UK population.

Skills Shortage

Vacancies remain stubbornly high and the recruitment gap is widening, with apprenticeship starts running well below the level needed to refill the workforce.

• There are nearly 40,000 current job vacancies in UK construction, with critical shortages in electricians, plumbers and carpenters.
• The sector needs 937,000 new recruits by 2032 to address the skills shortage.
• An additional 251,500 workers are needed by 2028 to meet projected demand, equivalent to around 50,300 new workers per year.
• Apprenticeship starts via the New Entrant Support Team reached 5,913 in 2025-26, a 43% rise on the previous year.
• Grants supported 30,837 apprentices in 2025-26, working with over 10,410 construction employers.
• Only 21% of construction businesses employ an apprentice, and just 10% employ more than one.
• Over 320,000 skilled workers have left the sector since 2019 due to early retirement or career changes, with over a third of the current workforce aged over 50.
• Apprenticeship starts need to triple from the current 33,000 per year to meet the industry's annual recruitment requirement.
• Construction wage growth remains above 7% year-on-year even as vacancies fall, reflecting structural labour market tightness.

Industry Structure and Businesses

UK construction is dominated by small firms, with the contractor base shrinking and SMEs accounting for the vast majority of businesses. The figures below show the scale and composition of the industry.

• There were 97,115 construction contractor businesses in the UK in 2025, down from 99,088 in 2024, a 2.0% year-on-year decline.
• The contractor base has declined at an average rate of 2.0% per year over the five years to 2024.
• Of all UK construction and built environment businesses, 99.1% are small businesses, the highest proportion of any major sector.
• Approximately 353,000 companies operate in construction with turnover under £10 million, qualifying them as SMEs.
• Sole proprietors and partnerships account for around 59% of total construction businesses.
• Only 21% of small construction firms employ an apprentice, versus 55% of medium firms and 34% of large firms.
• The UK modular construction sector has a total turnover of £13.1 billion across 753 companies employing 35,252 people, growing at 2.4% per year.
• UK exports of construction services have risen from £3 billion to £4.6 billion over three years, a 53% increase, with potential to reach £11.5 billion and create 142,000 new jobs.

Insolvencies and Financial Pressure

Construction continues to record more insolvencies than any other UK industry, though the headline rate has begun to ease from its post-pandemic peak. The figures below cover the latest counts, rates and sub-sector breakdowns.

• Construction recorded the highest number of company insolvencies of any UK industry in the 12 months to July 2025, with 3,973 companies in England and Wales becoming insolvent.
• Construction insolvencies represented 17% of all company insolvencies across all UK industries.
• The construction insolvency rate in the year to August 2025 was 52.6 per 10,000 companies, down from 55.5 the previous year but still 23.5% above pre-COVID levels.
• February 2025 alone saw 367 construction insolvencies, the highest monthly figure since June 2024 and a 20% increase on January 2025.
• Specialist firms were the most affected sub-sector, with 195 demolition, electrical and finishing trade firms becoming insolvent in July 2025.
• By insolvency rate relative to total companies, construction ranks third at 1.3%, behind accommodation at 2.6% and manufacturing at 1.7%.
• Despite high insolvency counts, the median profit margin on cost of production for construction firms was 3.68% in 2025-26, the highest in five years.
• Sector borrowing of £27 billion against net worth of £96 billion indicates moderate leverage, though cash flow remains a key vulnerability for smaller firms.

Costs, Materials and Tender Prices

Materials and tender price inflation cooled through 2024 and 2025 but is being pushed back up by the Middle East conflict, new regulatory costs and a structural wage floor.

Materials Prices

Headline materials inflation has eased from its 2022 peak, but individual product categories still show double-digit swings and import exposure remains heavy.

• The UK Construction Materials Price Index rose at a compound annual rate of 6.2% over the five years to 2024-25, a cumulative increase of nearly 39.6%.
• Flexible plastic pipes and fittings saw the largest 2024 price increase, rising over 14% year-on-year.
• Metal doors and windows rose 9% in 2024; several other building products rose over 4%.
• Steel product prices fell over 10% in 2024, offering relief for structural works.
• Brick deliveries in Great Britain fell 3.6% in the 12 months to March 2026.
• The UK imported nearly £4.2 billion of building materials from China in 2024, by far the largest single import source for UK construction materials.
• The Middle East conflict is expected to drive double-digit construction product price inflation in 2026, with UK industrial energy prices accounting for up to one-third of total manufacturing costs in energy-intensive products.

Tender Price Inflation

Tender price inflation forecasts have crept upward through early 2026, with infrastructure pricing running hottest and London again the world's most expensive city to build in.

• Tender price inflation for real estate is forecast at 3.5% per year, and infrastructure at 5.0%, through 2026 and 2027.
• UK weighted average tender price inflation is forecast at 3.0% for 2026 and 2.75% for 2027.
• Greater London is forecast at 3.25% tender price inflation in 2026, making it the most expensive city in the world to build in.
• The 2026 tender price inflation forecast was lifted to 3.45%, up from 3.27%, as the Middle East conflict threatens fuel and structural material supplies.
• Project starts under £100 million were down 15% year-on-year and overall market value was 26% lower, leaving residential and major-infrastructure pipelines particularly exposed.
• A new 50% import tariff on steel products takes effect in July 2026, with the Building Safety Levy following in October 2026, adding further cost pressure.

Government Housing Target

The government's 1.5 million homes pledge is well off the pace needed by the end of the parliament, with the current run-rate implying a delivery date several years late. The figures below set out progress, the required pace and the policy levers in play.

• The government's target is 1.5 million net additional dwellings in England over the current parliament, to August 2029.
• England added 208,600 homes to its stock in 2024-25, down from 221,410 in 2023-24.
• An estimated 342,100 homes were added between 9 July 2024 and 15 March 2026, around 22.8% of the 1.5 million target.
• To hit the target from March 2026, the government would need to add the remaining 1.157 million homes in just over three years, requiring an annual rate of approximately 325,000 completions.
• At the current annual rate, the target would take over five and a half more years from March 2026, leading the pledge to be rated "appears off track".
• England requires 370,408 new homes per year to meet its own assessment of national need.
• Planning reforms alone are forecast to boost housebuilding by 170,000 homes over five years, reaching 1.3 million new homes by 2029-30.
• New build starts rose 18% in the year ending September 2025 to 117,980, with Q3 2025 starts of 29,620 up 3% on the prior-year quarter.
• A new National Housing Bank receives £16 billion in public investment to build over 500,000 homes, alongside reforms in the Planning and Infrastructure Bill.

Sustainability and Carbon Emissions

Construction is one of only a handful of UK sectors where greenhouse gas emissions are higher today than 30 years ago, even as the wider economy decarbonises. The figures below show how far the sector lags net zero targets.

• UK construction sector greenhouse gas emissions in 2024 were 30.3% higher than in 1994, amounting to more than 11 million tonnes of CO2 equivalent (scope 1).
• Construction emissions rose 1.8% year-on-year in 2024 and 16.9% on 2014 levels.
• Construction's 30-year emissions rise was the third largest of any UK sector, behind real estate at 35.6% and accommodation and food services at 36.1%; UK economy-wide emissions fell 40.7% over the same period.
• Specialised construction works emitted 4.5 million tonnes of CO2e in 2023; civil engineering construction emitted 4.4 million tonnes.
• Construction's renewable and waste energy consumption in 2023 was more than 80 times higher than in 1993 and more than triple the 2013 level.
• Embodied carbon needed to fall 25% by 2022 to stay on track for a net zero built environment by 2050; the actual reduction between 2018 and 2022 was just 4%.
• Buildings and construction account for roughly 40% of global carbon emissions through construction, operation or maintenance.
• The UK Green Building Market was valued at USD 7.3 billion in 2025 and is forecast to reach USD 18.1 billion by 2034, a CAGR of 10.23%.
• Diesel (DERV) usage in UK construction more than doubled between 1993 and 2023, rising 121.8%, largely driven by transportation of resources and personnel.

Digital Technology and Innovation

Digital adoption has crossed a threshold in 2025, with AI use accelerating sharply and BIM penetration near saturation, though headline productivity continues to lag the wider UK economy.

BIM Adoption

BIM has reached near-universal recognition across UK construction, with adoption among consultants and product suppliers running well ahead of contractor uptake.

• BIM adoption in the UK construction sector reached 72.3% in 2025, up from 70% in 2023 and 71% in 2018.
• Almost 60% of contractors use BIM to coordinate systems aimed at improving energy performance.
• Nearly 88% of construction professionals either already use BIM or plan to, suggesting BIM is close to its natural market penetration ceiling.
• Of UK construction product manufacturers and suppliers, 73.4% now provide BIM or digital objects for at least some of their products.
• Among consultants, 88.3% already use manufacturer-provided BIM objects in their work.

AI and Digital Transformation

AI use among UK construction professionals has roughly quadrupled in five years, with most respondents now believing the sector is no longer lagging on digital adoption.

• Over 40% of UK construction professionals now use AI tools regularly, up from under 10% five years ago.
• Almost 60% of respondents worry their organisation risks falling behind on digital innovation, up from just over 33% in 2023.
• For the first time in 2025, more than 50% of professionals believe construction is no longer lagging behind other sectors on digital adoption.
• Nearly 66% of respondents now use software to assess energy and water demand, almost double the proportion two years ago.
• Volumetric modular construction can shorten a project timeline by up to 50% compared with traditional on-site methods.
• UK construction productivity improvement has been approximately 21% lower per year than the wider UK economy since 1997.
• AI-driven construction solutions can reduce project costs by up to 15%.
• Of UK and Ireland construction professionals, 21% say they never measure labour productivity.

2026 Outlook

The 2026 outlook is sharply negative at the headline level, with private sector contraction outweighing infrastructure growth, and recovery pencilled in only from 2027 onwards.

• UK construction output is forecast to contract 2.5% in 2026, the steepest downward revision since the 2022 energy price shock.
• Private housing output is forecast to fall 7.0% in 2026, driven by affordability pressures, high mortgage rates and sharp cost increases on site.
• Private housing repair and maintenance is forecast to fall 8.0% in 2026 as homeowners defer discretionary spending.
• Infrastructure output is forecast to grow 3.2% in 2026 and 3.4% in 2027, supported by energy contracts and the water sector's AMP8 programme.
• Commercial output is forecast to fall 3.7% in 2026, with activity concentrated in fit-out and refurbishment rather than new build.
• A new 50% steel import tariff takes effect in July 2026, and the Building Safety Levy follows in October 2026, adding further cost pressure.
• The construction workforce needs to grow to 2,752,790 by 2029, requiring more than 47,000 extra workers per year.
• The UK modular construction sector is forecast to be worth £15.7 billion by 2027, growing at 2.4% per year.
• UK construction service exports could grow from £4.6 billion to £11.5 billion, potentially creating 142,000 new jobs.
• From 2027 onward, the sector is forecast to achieve average annual growth of 3.0%, driven by infrastructure, housing, data centres and renewable energy.

Sources

1. Office for National Statistics (ONS) - Construction Output in Great Britain, Q1 2026 and historical bulletins
2. Office for National Statistics (ONS) - Construction Statistics Great Britain 2024, February 2026
3. Construction Products Association (CPA) - Spring 2026 Construction Industry Forecast, May 2026
4. Construction Products Association (CPA) - Winter 2026 Construction Industry Forecast, January 2026
5. Building Cost Information Service (BCIS) - Latest Construction Output Figures and Statistics, May 2026
6. Building Cost Information Service (BCIS) - Latest UK Housing Starts and Completions Figures, May 2026
7. Building Cost Information Service (BCIS) - Latest Construction Workforce Figures, February 2026
8. Building Cost Information Service (BCIS) - Construction Emissions Up by Nearly One-Third in 30 Years, November 2025
9. Construction Industry Training Board (CITB) - Construction Workforce Outlook Interactive Tool, 2024
10. Construction Industry Training Board (CITB) - Construction Apprenticeships: Opportunities, Challenges, Support, February 2025
11. Construction Industry Training Board (CITB) - NEST Apprenticeship Support Figures 2025-26, May 2026
12. Office for National Statistics (ONS) - UK Environmental Accounts: 2025, June 2025
13. Insolvency Service via Irwin Mitchell - UK Construction Insolvency Rates Remain High in 2025, September 2025
14. PBC Today - Construction Industry Leads Company Insolvencies in UK, August 2025
15. Turner & Townsend - Winter 2025 UK Market Intelligence Report, January 2026
16. Gardiner & Theobald - Q1 2026 Tender Price Inflation Forecast
17. Rider Levett Bucknall / Geomechanics.io - Tender Price Inflation Forecasts, March 2026
18. Arcadis - UK Construction Market View, Spring 2026
19. GM Insights - UK Construction Market Size, Growth Opportunity 2025-2034, February 2025
20. HM Treasury / NISTA - UK Infrastructure: A 10 Year Strategy, June 2025
21. ONS - Indicators of House Building, UK: Permanent Dwellings Started and Completed, 2026
22. Full Fact - Is the Government on Track to Deliver 1.5 Million New Homes?, updated May 2026
23. Housing Forum - The Roadmap to 1.5 Million New Homes, July 2025
24. NBS / Hubexo - Digital Construction Report 2025, October 2025
25. BIM Associates / Trimble - BIM Adoption in the UK, 2025
26. Mace Group - Construction Offers Global Britain a £11.5bn Export Opportunity, February 2025
27. The Data City - UK Modular Construction Industry Insight, 2025
28. IBISWorld - Construction Contractors in the UK Number of Businesses, December 2025
29. Opus LLP - Construction Sector Report: Stable Finances, Static Output, June 2025
30. Statista - UK Construction GVA 2024, Construction Industry Structure UK 1997-2024
31. Approach Personnel / ONS - Women in Construction: 2025 Trends and Growth, February 2026
32. RSM UK - Construction Firms Face Cash Flow Crunch Amid Rising Insolvencies, September 2025
33. UK Green Building Council - UKGBC, 2025