The latest Q1 2025 UK Construction Monitor from the Royal Institution of Chartered Surveyors (RICS) indicates that construction workloads have remained largely stable, with survey results suggesting a modest growth trajectory for the year ahead, primarily fuelled by infrastructure projects.

The RICS survey revealed an overall headline net balance for workloads of -1%, unchanged from the previous quarter. Infrastructure continues to be the strongest performing sector, reporting a robust net balance of +13%, with the energy sub-sector maintaining significant momentum at +35%. This growth is underpinned by several major energy infrastructure projects currently underway, including the Hinckley Point C nuclear power station and the ongoing development and expansion of offshore wind farms.

Despite the stable outlook for workloads, financial challenges continue to be a significant concern within the industry. Credit conditions reportedly weakened over the quarter, registering a net balance of -21%. Financial constraints were cited by 63% of respondents as the most substantial barrier to activity, closely followed by regulatory and planning issues.

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While the government has focused on reforming local planning processes, many survey respondents expressed ongoing frustration with bureaucracy and a lack of clarity hindering their work. Additionally, some respondents noted a "brain drain" of talent to opportunities in the Middle East and North America, while the persistent shortage of skills and labour continued to impact project delivery.

Looking ahead to the next twelve months, expectations for workload growth remain positive, albeit slightly scaled back, with a net balance of +17%. Infrastructure is projected to be the primary driver of sector growth (+32%), with the private residential and non-residential sectors also anticipated to experience some improvement. However, profit margin expectations have deteriorated for the third consecutive quarter, falling to -12%.

In a more positive sign for the sector, employment prospects appear stable, with hiring expectations holding steady at a net balance of +15% for the coming year.

Simon Rubinsohn, RICS Chief Economist, commented on the findings: "Construction activity was largely flat over the quarter with respondents expressing a little more caution in the face of the heightened level uncertainty both at a global and domestic level. In particular, concerns about the implementation of tariffs and what this might mean for costs and economic activity as well as the potential impact of the uplift in employer NI contributions are highlighted in the feedback."

He also highlighted the persistent challenges: "Significantly, aside from financial issues the most cited obstacle to activity referenced in the survey is planning and regulation which chimes neatly with the government’s agenda. Addressing this issue is critical if the ambitions around housing and infrastructure are to be met."

Concluding on the outlook for the sector, Rubinsohn stated: "That said, for now the forward-looking metrics point to a relatively modest uplift in construction workloads over the next twelve months with profitability in the sector remaining under pressure."