PwC鈥檚 latest Construction and Housebuilding Outlook forecasts the UK construction sector to grow in 2025, with real output predicted to rise by approximately 1% despite ongoing challenges across housebuilding and commercial segments.聽
PricewaterhouseCoopers鈥� forecast for UK construction is less bullish than other industry forecasts, notably the Construction Products Association, which currently reckons UK construction will grow by 1.9% in 2025.
PwC forecasts that infrastructure output will grow by 1.3% in 2025 鈥� a slower near-term trajectory than it previously expected, due to delays in major transport schemes. Spend continues to grow from historical highs led by investment in energy and water, resulting in expected real-term growth of around 3-4% in 2026-27.
Industrial construction is forecast to grow by approximately 2% in 2025, PwC says, driven by growing factory pipelines linked to defence and advanced manufacturing. Key projects like the Tata battery gigafactory and aerospace and defence investments underpin this segment's strength.
It reckons that repair & maintenance (R&M) activities have begun to normalise relative to new build projects in 2025, after outperforming for several years. While R&M has grown strongly since the pandemic, new build is projected to stabilise and return to growth from 2025, restoring momentum within new construction over the medium term, PwC says. Residential construction is expected to see a slowdown, following three years of real growth, as discretionary spending is subdued despite falling mortgage rates.
Commercial Sector remains polarised, PwC says, with robust growth in life sciences and data centres offsetting persistent weaknesses in office and retail segments. Commercial new build output is expected to remain flat in 2025 given a continued decline in traditional segments, before strengthening in 2026-27 as conditions improve.
Cara Haffey, partner and leader of industrials & services at PwC UK, said: 鈥淚t鈥檚 promising to see the continued growth in the sector considering the challenging headwinds it faces - government support is making a difference to the longer-term outlook for growth.聽
鈥淥ur report highlights an opportunistic period for the UK construction sector particularly within the infrastructure sector which is forecasted for robust growth. As the industry navigates a dynamic landscape, it is imperative to exercise disciplined project selection and capital deployment. The opportunities within power and water are substantial, with record investments paving the way for expansion and innovation. By maintaining operational discipline and leveraging opportunities in high-growth sectors, companies can effectively set a strong foundation for sustained development in the years to come.鈥�
The full report is available at
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