Increased public spending, software advances, sustainability, more offsite construction, and continuing high insolvency rates are expected to be some of the main trends in the construction industry in 2025.
Most in the industry will be saying good riddance to 2024 after what was a turbulent and challenging 12 months that saw key failures, rising bad debt levels, and an overall decrease in construction output.
Fortunately, 2025 is predicted to be better for the industry as a whole, with potential large public cash injections, an increase in output, and many large projects starting. Whilst it’s true that many of last years challenges will remain, there is much to be hopeful for.
So, to help you start the new, better year off on the right foot, let’s look at some of the major trends that we expect to see in 2025 for the construction.
After years seemingly in the wilderness, the construction industry is finally getting a much needed cash injection from the government, in the form of ambitious house building and infrastructure projects.
The government has set a target of building 300,000 new homes each year of this parliament and has outlined ambitious and significant plans for developing the country’s infrastructure. This will require billions of pounds from public funds to achieve, and will offer many construction firms a significant lifeline.
It is expected that these plans will start to take shape in the second half of the year.
After last year’s shrinking of overall construction output, it is expected that the industry will get back on track in 2025.
With the government looking to spend big and several major projects slated to start, we are already off to a good start.
But even better, it is expected that there will also be an 8% increase in projects valued under £100m this year. Showing that the industry is showing signs of recovery from top to bottom.
The building information modeling (BIM) and digital twinning software available to the industry is expected to become much more powerful, advanced, and accessible in 2025.
If you’re unfamiliar, these essentially allow a digital version of a project to be built, allowing for any discrepancies or problems to be identified and corrected before ground is broken. Meaning that major projects will see less delays and wastage.
The construction industry has, in many ways, been at the forefront of adopting sustainable practices over the last ten years. We can expect that to ramp up even more over the course of this year.
When the government introduced sustainability targets for the industry to achieve by this year in 2013 many large companies also introduced their own more ambitious targets. These companies will be able to reflect on their own successes and failures and are expect to set further long-term sustainability targets before the end of the year. These will have significant effects on most major projects and all who work on them.
In addition to an increased use of preexisting sustainable materials and practices, technology’s role in increasing the sector’s sustainability is expected to grow.
Offsite/prefabricated construction is tipped to play a big part in the industry in 2025.
This involves building components being assembled in a controlled factory setting and then transported to the build site.
By doing so, building components can be assembled with a larger focus on quality and innovation, use innovative techniques and materials unavailable in the field, and remove the weather as a delaying factor.
Two of the most popular offsite construction techniques are volumetric construction, which allows for whole rooms or structures to be prepared offsite; and, panelised construction, which focuses on producing floor, wall, ceiling, and roof panels being mass produced in a factory and the quickly assembled on site.
Despite the industry starting to recover in 2025, insolvency and bad debt will still be present in levels much higher than most other industries.
It is likely to be especially bad over the first two quarters as the hangover from ISG’s mammoth £1.1 billion failure last year starts to be felt.
But for those companies that are able to effectively manage their bad debt and supply chain risks, 2025 may prove to be the year the sun started to rise again for construction.