UK Construction Crisis: Job Cuts, Skills Shortages & Soaring Costs

The UK construction industry is facing one of its toughest years in 2025. Sluggish growth, layoffs, and a severe shortage of skilled workers are casting doubt on the government’s ambitious housing goals. At the same time, new opportunities are emerging through digitalisation, green building, and planning reform.

According to the latest S&P Global report, the UK’s construction PMI fell to 46.4 in March — the lowest level since the pandemic, as Bloomberg reports. A reading below 50 indicates contraction. The most alarming trend is the rapid job loss, which has reached levels unseen since 2020. Companies cite weak demand, real estate uncertainty, and rising labour and materials costs.
"There are no clear signs of stabilisation yet. High interest rates and a lack of incentives are holding back construction activity," said Tim Moore, Director of Economics at S&P Global.

Even major players are feeling the heat. Travis Perkins, the UK's largest building materials supplier, reported a 23% drop in profits for 2024 and warned of continuing difficulties in 2025. The company’s shares hit their lowest level since 2010, driven by sluggish demand in home improvement and a sharp decline in new home sales amid high mortgage rates, according to Reuters.

The labour market is sending warning signals. As per The Times, citing Building Magazine, the number of skilled bricklayers in the UK has dropped to a 25-year low due to an ageing workforce and lack of new entrants. Over 30% of bricklayers are expected to retire in the next decade. Brexit and the pandemic significantly reduced the number of EU workers, particularly from Eastern Europe.
"Young people aren’t joining the profession — it’s no longer a shortage; it’s a systemic crisis," said Julian Holmes, HR Director at construction firm Mace.

David Thomas, CEO of Barratt Redrow, argues that achieving the target of 1.5 million new homes in five years requires not just subsidies but major planning reform.
"If we stick to the plan, the goal is achievable — but bureaucratic delays, local opposition, and opaque approval processes remain major hurdles."

Trade unions are calling for urgent state intervention. Unite the Union, the UK’s largest construction union, warns of a “silent crisis” where layoffs are happening with little media attention but at pandemic-scale levels.
"The government must move from talking about building to actually saving the sector. Without support, we risk losing an entire generation of skilled workers," said Sharon Graham, General Secretary of Unite.

The union is pushing for tax breaks for companies that retain staff, and subsidies for training new workers. The Federation of Master Builders (FMB) shares similar concerns: 73% of small construction firms reported a drop in profits, and 62% said they face staff shortages.
"If small businesses vanish, the sector’s recovery could take decades," said Brian Berry, FMB’s Chief Executive.

According to Rightmove, the average UK home cost £363,000 ($469,000) in March 2025 — up 2.8% from last year. Real wages, however, are stagnant, and mortgage rates remain at 4.5–5%, pricing many young families out of the market.
Shelter charity reports that over 17 million people live in housing that fails to meet safety or comfort standards, and social housing waiting lists are growing.
"We’re building too little, too slowly, and at too high a cost. Housing should be a right, not a privilege," said Polly Neigent, Shelter analyst.

Despite the sector's stagnation, two trends are gaining ground: sustainable construction and digitalisation. More firms are investing in BIM technologies, 3D printing, modular housing, and low-carbon materials. The government plans to expand funding for green infrastructure, especially in urban areas.
"The future lies in digital, energy-efficient homes. Technology enables faster, cheaper, and greener building," said Sarah Millington, Technical Director at BRE.