UK builders and construction manufacturers are positioning for a post-pandemic boom, with housebuilding activity expected to rebound strongly in the second half of 2025—offering a rare bright spot amid global economic headwinds and the fallout from Donald Trump’s new tariff regime.
Despite recent housing market jitters and rising interest rates, major players in the sector are betting on a turnaround. New domestic manufacturing capacity, such as Etex’s £170 million plasterboard factory near Bristol, is being brought online to reduce reliance on foreign imports and meet the demands of a national housing acceleration.
John Sinfield, Etex’s UK managing director, said: “You’ve got to invest ahead of the curve.” His new 57,000 square metre plant will recycle 35% of its materials from UK waste sources, further shielding the sector from the kind of global supply chain disruptions that paralysed construction during Covid.
Others in the supply chain, including Richard Burbidge—a 158-year-old timber stair manufacturer based in north Wales—are similarly preparing for demand to increase, even as they grapple with higher energy costs, raw material inflation and labour shortages. “We’re staying agile,” says managing director Josh Burbidge. “And if US tariffs make American timber less competitive, we’ll pivot to Europe.”
The more optimistic outlook for UK construction comes despite data showing that employment in the sector fell sharply in early 2025, and that the broader housing market slowed in May. However, confidence is being restored in part by Labour’s planning reform bill—designed to streamline approvals—and by Chancellor Rachel Reeves’s £39 billion boost to social and affordable housing, announced in this week’s spending review.
Angela Rayner, the deputy prime minister and housing secretary, emerged as a key winner from the negotiations, securing a decade-long funding commitment that aims to put the government’s target of 1.5 million homes within reach.
Analysts say the outlook for the sector is beginning to improve. Glenigan, the construction data provider, reported a 24% rise in residential starts in the three months to April, and forecast over 5% growth in housing starts this year, rising to 7% in 2026.
Noble Francis, chief economist at the Construction Products Association, predicts 2.1% growth in total construction output in 2025, led by residential building in the latter half of the year. “Brick deliveries are a useful proxy,” he adds, noting that stock levels remain high following a sharp rise in production earlier this year.
On the front lines of new housing, housebuilders are cautiously bullish. Bellway Homes reported “robust” spring trading and a strong forward order book, while shares in FTSE 100 developers including Barratt Developments, Redrow, and Taylor Wimpey rallied on Tuesday.
That optimism is reflected in the wider construction ecosystem. With imports of building materials from the US potentially subject to further tariff hikes under the Trump administration, the UK’s strengthened domestic supply chain is providing greater resilience—and even potential export opportunities.
Glenigan’s chief economist, Allan Wilen, says: “UK firms could benefit from US-bound materials being redirected due to tariffs—some of those products could end up being more competitively priced in the UK market.”
One major risk to the sector’s recovery is the availability of skilled labour. A clampdown on immigration has raised fears of construction labour shortages just as activity begins to pick up. In response, the government announced a £3 billion investment to train 120,000 skilled workers—including bricklayers, electricians, and carpenters—by 2030.
Still, the recent S&P Global survey showed that construction job losses in May were the worst since the 2010 financial crash (excluding the pandemic), raising concerns that the industry may struggle to ramp up capacity quickly enough.
With construction accounting for roughly 6% of UK GDP—contributing £170 billion in 2024—the sector’s performance is seen as pivotal to broader economic recovery. The Labour government believes the combination of planning reform, public investment, and private sector momentum could generate £6.8 billion in extra activity by the end of the decade.
But, as ever, timing is key. As Sinfield of Etex notes, “The project pipeline is strong. The only question is how long it takes for contractors to go from the drawing board to being on site.”
If the sector can overcome supply chain scars from the pandemic, manage labour shortages, and translate policy momentum into real-world construction starts, it could be building its way not just out of a downturn—but into a new era of sustainable growth.
