Building momentum: planning for construction growth in 2025

As part of our commitment to delivering value beyond investment, we help our portfolio businesses to connect and grow in ever-changing markets. During a recent roundtable we facilitated, a group of CEOs from the construction and building products sectors discussed key trends driving change and growth in the industry.

During the discussion, Allan Wilen — Glenigan’s Economics Director, former Economics Director at the Construction Products Association, and member of the National Council of Building Material Producers — delivered actionable insights to drive business growth and market success.

From green materials and labour shortages to evolving market demands, read on to explore what strategies and priorities they believe are shaping the future of the construction sector.

A stabilising landscape poised for growth

The construction and property services sectors are being shaped by changing market dynamics, sustainability demands, and technological innovation.

After years of navigating uncertainty from economic shocks and labour shortages, the UK construction and property services sector is cautiously optimistic about the future. With a new government, fresh budget initiatives, and evolving market dynamics, the outlook for 2025 appears increasingly promising.

Private housing is at the forefront of this recovery. But social housing is also gaining traction, with £500 billion earmarked for affordable housing by 2025/26 and expanded shared ownership programmes opening new opportunities for first-time buyers. Student accommodation is thriving, meanwhile, as purpose-built spaces replace traditional buy-to-let models, to meet evolving demands.

Significant funding increases in education, healthcare, and utilities (particularly in the water industry) are also setting the stage for major infrastructure growth over the next five years. Emerging trends like the adoption of green materials, workforce upskilling, and enhanced supply chain resilience are already shaping the industry.

Sustainability: the new currency in the construction industry

Sustainability is rapidly becoming a cornerstone of the construction industry, with green materials and energy-efficient technologies transitioning from niche options to essential components of modern projects. ESG-related certifications, such as B Corp status, are becoming increasingly valued — acting as powerful tools for attracting younger employees and environmentally-conscious consumers.

High upfront costs remain a significant barrier for businesses, however, despite the potential for longer-term savings. The return on investment for many green initiatives often spans up to 20 years, making government incentives and grants critical to accelerating adoption. Without this support, many businesses face difficulty justifying the initial expense.

The surge in energy costs is another driver behind the push for energy-efficient developments, as businesses and consumers alike seek to mitigate rising expenses. For many cost-conscious consumers though, affordability still outweighs sustainability, adding pressure on companies to balance eco-friendly innovations with competitive pricing.

The workforce challenge: from classrooms to careers

An aging workforce and limited labour requires creative solutions. Some businesses are collaborating with local colleges to recruit students with transferable skills, for instance, while others are sponsoring international talent to bridge gaps, particularly for specialised roles.

Some businesses are also leveraging apprenticeship schemes to train new talent. The Apprenticeship Levy has drawn criticism, however, for its complexity and inflexibility — offering long-term potential, but failing to meet immediate workforce demands.

AI and BIM: tackling delays and complexity through emerging technologies

Emerging technologies, such as artificial intelligence (AI), are helping businesses to streamline processes, reduce energy consumption, and mitigate delays. But the adoption of these tools requires substantial investment, in both the technology itself and in upskilling existing teams. For many businesses, the high costs of training and implementation still present a considerable hurdle.

Meanwhile, delays to planning timelines, brought on by the COVID-19 pandemic, have been further exacerbated by regulatory challenges. This includes The Building Safety Act, which has added new layers of compliance and complexity. However, tools like Building Information Modelling (BIM) and AI-driven project planning solutions are helping businesses improve efficiency and mitigate the effects of prolonged timelines.