UK Construction Remains Stifled by Economic Uncertainty and Planning Delays

THERE WAS a further slowdown in construction activity across the UK in Q3 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 headline construction workloads indicator fell to -8%, signalling a broader cooling in activity following a period of stability earlier in the year. New project workloads declined noticeably, slipping to -13%, while repair and maintenance work held broadly steady at +2%.

Infrastructure remains the one bright spot, with activity still in positive territory (+8%), though momentum has eased compared to previous quarters. Communications, energy, and water & sewage infrastructure continue to show resilience, with the energy sector reporting the strongest performance at +29%.

Recruitment Difficulties

Despite labour challenges easing slightly, firms still face recruiting difficulties, particularly in skilled trades and professional roles. However, 21% of firms reported net hiring growth in Q3, suggesting a cautious but continued commitment to workforce investment.

Survey respondents expect a modest improvement over the next 12 months, with infrastructure leading growth expectations at +24%, though down from +34%. Private residential and commercial expectations remain muted.

Business profitability remains a concern, with expectations for profit margins falling deeper into negative territory (-19%), reflecting cost pressures, competitive tendering, and prolonged regulatory processes.

Key Challenges

Respondents across the UK highlighted common themes, including:

• Severe planning delays and capacity shortages within planning authorities
• Building Safety Act compliance delays slowing project starts
• Cautious credit conditions and funding barriers
• Skills shortages, especially in specialist trades
• Pressure from sustainability and regulatory demands

Simon Rubinsohn, RICS Chief Economist

RICS Chief Economist, Simon Rubinsohn, said: “The latest RICS Construction Monitor show current activity levels to be broadly flat with only a modest uplift anticipated over the course next twelve months. As in the previous survey, it is infrastructure sector where workloads are viewed as likely to see the strongest gain with the residential trend remaining more subdued.

“Challenges around the current planning regime continue to be cited by respondents to the survey alongside financials but a lack of demand is also being raised more frequently. Despite this, the skills issue remains pertinent with a shortage of quantity surveyors continuing to be highlighted.

“This chimes with the results of the recently released RICS Surveying Skills Report which not only points to capacity constraints but also draws attention to the impact this shortage is having on innovation in the industry.”

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