2024 Construction Starts Increased 20% on 2023

2024 CONSTRUCTION STARTS increased 20% on 2023, Glenigan reports in their January 2025 Construction Review.

The review covers all projects sector-wide, with all underlying figures seasonally adjusted.

2024 in Review

Despite economic turbulence, 2024 emerged as a pivotal year for construction, driven by gains in major project-starts and growth in underlying activity.

Overall project starts averaged £10,372 million per month, up 20% from 2023. Major projects saw an 58% increase, underscoring renewed confidence in large-scale developments. Meanwhile, underlying project-starts edged up by 1%.

Averaging £9,595 million per month, overall main contract awards dipped 4% year-on-year, reflecting caution among developers. Underlying awards decreased by 5%, while major projects also saw a 4% drop compared to 2023.

Detailed planning approvals struggled, falling 19% overall, with major projects hit hardest at a 34% decline. Underlying approvals dropped by 6%.

Sector Analysis – Residential

Residential construction starts experienced a challenging year, finishing 4% lower than 2023 levels.

Private housing starts were down 9% compared to 2023, while social housing declined 10%, highlighting ongoing affordability and funding challenges.

Sector Analysis – Non-Residential

Non-residential performance was mixed throughout 2024.

Hotel and leisure starts were the standouts, showing strong growth, rising 30% year-on-year.

Civil engineering thrived, with starts in the sector finishing 16% up on the year before. Infrastructure projects rose 17%, while utilities saw a 14% increase year-on-year.

Community & Amenity construction also rose to stand 11% higher than 2023.

Education also fared well with starts increasing 7% against last year’s results.

The industrial sector had a modest growth year, with starts growing 4%.

Only the office sector performed poorly. Reflecting shifts in workplace trends, a 19% year-on-year decline was recorded.

Regional Analysis

The South East led growth as the strongest performing region of the UK, with project starts increasing 17% compared to 2023.

Starts in Northern Ireland (+23%) and the South West (+13%) also grew against the previous year.

Yorkshire and the North West also had a good year, with starts rising 8% and 5% year-on-year, respectively.

Some areas of the UK performed poorly, including Scotland and the East of England where the value of projects fell 2% and 1%, respectively.

London also had a challenging year, posting a 15% decline overall against 2023 levels.

Outlook

Allan Wilen, Glenigan Economic Director, 

Allan Wilen, Glenigan’s Economic Director, says, “While 2024 brought challenges, the construction sector demonstrated remarkable resilience, supported by strong gains in major project-starts including renewable energy and rail projects. Despite Budget constraints and concerns over tax changes dampening growth in late 2024, the outlook for 2025 is positive.

Housing and Hospitality

“Increased government and household spending, as projected by the OBR, will likely provide a much-needed boost across key construction sectors, particularly private housing, retail, and leisure. Private housing is expected to see a 13% growth in project starts, with build-to-rent and SME-focused initiatives broadening development activity. Retail projects, while modestly forecasted to grow by 1%, are set to benefit from a more positive economic outlook. The hospitality industry is poised for a revival, with hotel and leisure construction starts predicted to rise by 6% with landmark projects like the £250 million Therme UK development providing an additional boost to sector activity.

Commercial

“Elsewhere, industrial and civil engineering sectors are set to expand, driven by projects such as the £8 billion Hornsea Four development and £350 million Altalto Immingham facility. Meanwhile, office developments are on track for an 18% growth in starts, with investment in data centres, including the £400 million G Park Docklands Data Centre, reflecting the rise of AI and digital transformation.

Infrastructure

“This broad-based growth presents opportunities for contractors to capitalise on emerging trends, especially as major investments in infrastructure, education, and health – such as the £215 million Cambridge Children’s Hospital and the £80.3 million Ardrossan Community Learning and Innovation Hub – gain momentum. With resilience and adaptability, the industry is well-positioned to meet these demands and thrive in 2025.”

>>Read more from Glenigan in the news