UK construction activity suffered its steepest quarterly decline since early 2023 as economic uncertainty weighed on building work and household spending, according to new figures from the Office for National Statistics.
Total construction output fell by 1.1% in the three months to November 2025, the largest drop since March 2023.
Both new work and repair and maintenance activity weakened over the period, falling by 1.0% and 1.1% respectively, underlining the breadth of the slowdown across the sector.
At a sector level, output declined in four of the nine construction categories tracked by the ONS.
REPAIR AND MAINTENANCE
The largest drag came from private housing repair and maintenance, which slumped by 3.7% over the three months, highlighting the pressure on household budgets and discretionary spending.
Monthly figures point to a worsening trend towards the end of the year. Construction output fell by 1.3% in November alone, following a downwardly revised 1.2% fall in October and reversing a modest 0.3% rise in September.
The November decline was driven primarily by a sharp drop in new work, which fell by 1.9% on the month, while repair and maintenance activity also edged lower, down 0.4%.
ECONOMIC UNCERTAINTY
The ONS said anecdotal evidence from the industry suggested that delays to projects and weaker customer spending were linked to heightened economic uncertainty in the run-up to the autumn budget, as firms and households postponed decisions amid concerns over costs and the wider outlook.
The latest data adds to signs that construction, a key barometer of economic confidence, ended 2025 on a fragile footing, with momentum weakening just as policymakers and businesses look to the new year for signs of recovery.
DISAPPOINTING YEAR FOR HOUSEBUILDING
Neil Leitch (main picture, inset), managing director of development finance, Hampshire Trust Bank, said: “These figures reinforce what has been evident throughout 2025.
“It has been a disappointing year for housebuilding, marked by a persistent gap between ambition and delivery.
“Developers want to build, demand from buyers and tenants is clear, but the conditions required to move schemes forward with confidence are still not in place.”
“The challenge is not intent, but capacity and consistency.”
And he adds: “Planning remains the most significant structural issue. The challenge is not intent, but capacity and consistency. Planning departments are under-resourced, decision times are lengthening, and experienced planners are leaving the profession.
“Without sustained investment in skills and local authority capacity, reforms on paper will struggle to translate into homes on the ground, including the proposed changes to the National Planning Policy Framework.”
“While central government has introduced funding to support the recruitment of junior planners, industry estimates suggest the overall pipeline remains thin, with fewer new entrants than the sector needs to replace those leaving.
Leitch says: “Local Planning Authorities also struggle to compete with the private sector on pay and career progression, making retention increasingly difficult and placing further strain on already stretched teams.
“What is often overlooked is the time lag in development.”
“There is no single fix for these issues, but confidence is the critical missing ingredient. Developers, particularly SMEs, need certainty that approvals will lead to starts and that delays can be managed realistically.
“What is often overlooked is the time lag in development. Decisions delayed today will translate into weaker output years down the line, long after the focus has shifted elsewhere. Funding is available for well-structured, viable schemes, but projects need flexibility built in from the outset to cope with the realities of delivery.
“Without that confidence and consistency, the risk is that 2026 looks much like 2025.”
