Glenigan forecasts UK Construction down for 2025 with recovery set for 2026

The latest Glenigan Construction Industry Forecast is predicting a 6% fall in construction output by the end of 2025. This is rather disappointing and surprising as the year doesn’t seem to have been that negative and is nothing like the 8% growth Glenigan were forecasting at the beginning of the year. It is a testament to the turbulent economic times we are living in. But there are bluer skies on the horizon with an increase in output of 8% again forecast for 2026. Perhaps it has just been deferred.

Some of the key drivers of growth in construction in 2026 are offices and education. Growth in office construction is predicted to reach 16% in 2025 with a further 13% in 2026. Office based employment is expected to grow as companies pivot away from not quite so much hybrid working. In addition to this, AI development is increasing office demand further with the creation of data centres.

Following a disappointing 2025, Education is set to return to growth with a 15% rise forecast in 2026. Key drivers include the school rebuilding programme which is set to lift sector activity from 2026.

Other forecast growth areas include both social and private housing at 6% respectively and industrial at 12%. Student accommodation which sits within the social housing sector, is set for a rise in project starts as developers look to capitalise on the reduction in the number of buy to let investors in the market.