According to the latest ONS report for June, construction output saw a rise of 0.3%, slightly offsetting the 0.5% drop in the preceding month
The monthly increase is due to the 1.2% growth in repair and maintenance. The primary drivers were private housing repair and maintenance, which rose by 3.7%, and non-housing repair and maintenance, which grew by 0.8%.
However, new work receded by 0.4%, and new orders declined by 8.3% in Q2, weakening the pipeline by £976m. The decrease in orders came mainly from new infrastructure work and private commercial new work.
This is likely due to the upcoming Autumn budget, as construction firms begin to prepare to tighten their belts even further.
The full ONS stats for June 2025 can be found here.
Output is still at pre pandemic levels
Neil Leitch, managing director of development finance at Hampshire Trust Bank, said: “A rise in new private housing is good to see, but output is still below where it was before the pandemic, so there is a long way to go. Approvals on paper do not build homes.
“Unless the firms who do the work are financially stable and have the people they need, those permissions will just sit there. That’s the real risk – approvals without delivery.
“A lot of SME construction firms, and the subcontractors and suppliers they rely on, are under pressure. Begbies Traynor’s figures show more are in financial distress, and ONS data has construction as the slowest growing sector of the economy in the first quarter.
“When delivery depends on businesses operating on fine margins, the sector is always one shock away from stalling.
“We will not hit housing targets unless the whole delivery chain is strong enough to meet them. That means giving planning teams the resource to make timely decisions, backing SME construction businesses so they can commit to projects, and replacing the skills we are losing as the workforce ages.
“Without that capability on the ground, the ambition to build more homes will stay just that, an ambition.”
Growing uncertainty
April’s ONS stats showed a mild but steady growth, with six of the nine sectors increasing, and general output rising by 0.5%.
New work was the key contributor to said growth, as it grew by 1.4%, while repair and maintenance grew by 0.3%.
At the time, with words that still ring true, Neil Leitch said: “Another month of growth in private housing is an encouraging sign of resilience in the market.
“Developers are finding ways to move forward despite challenging conditions, but we cannot ignore the biggest hurdle they face: the planning system. Painfully long waits for approvals are still holding back the delivery of much-needed homes.
“The government’s recent proposals to streamline the system for SME developers are a welcome signal, and it is positive to see the issues raised by the industry starting to gain traction. But we have to be clear-eyed about what this will achieve in practice.
“Without serious and sustained investment in local planning departments, the system simply lacks the capacity to deliver faster outcomes.
“Policy ambition alone is not enough. Developers are dealing with an unpredictable system where delays can derail project timelines, add cost pressures and affect funding viability.
“Until those practical realities are addressed on the ground, it will remain an uphill battle to get anywhere close to the government’s long-standing ambition of building 300,000 new homes per year.”
