THERE WAS a further slowdown in construction activity across the UK in the third quarter of 2025 as economic uncertainty, regulatory challenges and planning delays continue to weigh heavily on the sector.
This is according to the latest UK Construction Monitor from the Royal Institute of Chartered Surveyors (RICS).
Planning delays
The overall construction workload indicator fell to -8%, indicating a general slowdown in activity after a period of stability at the start of the year. The workload on new projects fell noticeably, falling to -13%, while repair and maintenance work remained largely stable at +2%.
The only bright spot remains infrastructure, whose activity is still in positive territory (+8%), although the momentum has slowed compared to previous quarters. Communications, energy and water and wastewater infrastructure continue to show resilience, with the energy sector recording the strongest performance at +29%.
Difficulties in recruiting
Although labor market challenges are easing slightly, companies still have difficulties recruiting employees, particularly in skilled trades and skilled trades. However, 21% of companies reported net hiring growth in the third quarter, suggesting a cautious but continued commitment to workforce investment.
Survey respondents expect a slight improvement over the next 12 months, with infrastructure leading growth expectations at +24%, albeit down from +34%. Private residential and commercial expectations remain subdued.
Corporate profitability remains a concern as profit margin expectations fall deeper into negative territory (-19%) due to cost pressures, highly competitive tenders and lengthy regulatory processes.
Key challenges
Respondents across the UK highlighted common themes including:
- Significant planning delays and capacity bottlenecks at the planning authorities
- Compliance with the Construction Safety Act delays the start of the project
- Restrictive credit conditions and financing hurdles
- Shortage of skilled workers, especially in specialist professions
- Pressure from sustainability and regulatory requirements
RICS chief economist Simon Rubinsohn, said: “The latest RICS construction monitor shows that current activity levels are broadly flat, with only a slight increase expected over the next twelve months. As in the previous survey, workloads in the infrastructure sector are expected to increase the most, while the housebuilding trend remains more subdued.”
“In addition to financials, challenges associated with the current planning system continue to be cited by survey respondents, but lack of demand is also increasingly highlighted. However, the issue of skills remains relevant as a shortage of quantity surveyors continues to be highlighted.”
“This aligns with the findings of the recently published RICS Surveying Skills Report, which not only highlights capacity shortages, but also draws attention to the impact these shortages are having on innovation in the industry.”
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