Construction Trends 2025

Despite facing one of its toughest years, the construction sector made a strong recovery in 2024. Nevertheless, the industry has had to navigate its fair share of challenges. Years of economic uncertainty. labour shortages, high interest rates and weakened consumer demand have tested the industry’s resilience. Now, there's a renewed sense of optimism. Large-scale infrastructure projects, digital transformation, and a shift towards sustainable practices reflect growing confidence in market conditions.

New strategies and priorities are set to redefine resilience in the industry. A more supportive government, increased project starts, technological advancements, and long-overdue planning reforms could set the stage for real transformation.

From green materials and modular construction to changing market dynamics, this blog explores the key strategies and priorities shaping the construction sector in 2025. 

With the building value chain representing 37% of total global carbon emissions, sustainability remains a central focus as firms seek to cut costs and avoid reputational damage.

Fluctuating energy costs are the dominant force driving energy-efficient developments. Everyone wants to cut costs where possible, but price sensitivity often outweighs sustainability efforts. Sellers need to strike a balance where eco-friendly investments make financial sense to stay competitive.

Despite the long-term savings, high upfront costs remain a significant barrier to green investment. While it pays off over time, returns can take up to 20 years. Without government incentives and grants, many businesses will struggle to justify the expense.

As sustainability gains continues to gain momentum, B Corp certification is emerging as a gold standard. Companies that embed sustainability into their entire value chain are attracting both skilled young talent and environmentally conscious consumers — giving them a clear edge in the market.

After years of underfunding, the sector is feeling optimistic about the future. With a new government committed to growth, increased budgets, fresh initiatives, and a reformed planning system, 2025 is shaping up to be a turning point.

Housing is a key priority. The government has pledged to build 1.5 million homes by 2029, a target that will require billions in investment. For many construction firms, this could provide much-needed stability and opportunity to put their firm back on a growth trajectory. 

Infrastructure is also back in the spotlight. Previously, large-scale projects have long faced countless challenges from local opposition, financial constraints, and a complex planning system that has slowed progress. In recent months, major projects like new reservoirs, the East-West Rail link, and the expansion of Heathrow and Gatwick Airports are back on the agenda, setting the stage for long-term sector growth.

What the industry needs now is clarity, commitment, and investment to deliver real economic progress. This renewed momentum in building and planning is the long-awaited shift firms have been hoping for, a chance to secure their pipeline and plan for the future.

Can we build it? No, because Britain may not have enough workers. A shrinking talent pool has been a persistent issue, and 2025 is set to intensify this. Wage inflation, an ageing workforce, rising demand for skilled workers, and a decline in training investment have left the industry needing 937,000 recruits over the next decade to meet growth projections and bridge the skills gap.

Industry experts warn that the skills shortages could strip output delivery and impact the government’s growth plans. Ultimately, as demand outstrips supply, wages will continue to rise, putting pressure on already tight budgets and potentially slowing project progress and creating a cycle that undermines efficiency across the sector.

To tackle the issue, construction firms are being urged to attract and train new talent by partnering with local schools and colleges. But while this addresses the long-term workforce gap, it does little to resolve immediate labour shortages. Retraining skilled workers, tapping into transferable skills from other industries, and exploring international recruitment will be crucial in bridging the gap and ensuring project deliverability in the near term.

Technology is reshaping the construction industry, offering new ways to cut costs, improve efficiency, and stay competitive. Advancements in AI (Artificial Intelligence) and BIM (Building Information Modelling) are at the forefront of this shift, but adoption among UK construction firms remains inconsistent, particularly among SMEs which make up a large portion of the sector.

The main barrier? Many of these tools require significant investment, with high implementation fees and the need for extensive upskilling in both staff and technology. For smaller firms, the return on investment isn’t always clear, making the investment unjustifiable.

Growing environmental concerns, stricter regulations around sustainability, and building safety in the wake of Grenfell will become a key hurdle for the sector in 2025. With the government introducing new policies and standards to address the environmental impact, building safety, and workers protection, compliance with these regulations will be key for project deliverability in 2025 and beyond.

Many firms have implemented technology to improve religious compliance and streamline processes, giving them a competitive advantage and the footing to thrive in an increasingly regulated landscape. This proactive approach not only avoids costly financial penalties but also protects their reputation and improves their marketability, key for increasingly eco-conscious clients and customers.