Economic uncertainty, regulatory changes and planning delays have all caused construction activity to slow down across the UK in the third quarter of 2025, the RICS UK Construction Monitor research found.
The headline construction workloads indicator fell to -8%, while new project workloads fell by -13%, signalling a cooling of activity.
Profitability is a concern, with expectations for profit margins falling deeper into negative territory (-19%), reflecting cost pressures, competitive tendering, and prolonged regulatory processes.
Firms are struggling to recruit skilled trades and professional roles, though 21% of firms saw net hiring growth in Q3.
Simon Rubinsohn, chief economist at RICS, said: “Challenges around the current planning regime continue to be cited by respondents to the survey alongside financials but a lack of demand is also being raised more frequently. Despite this, the skills issue remains pertinent with a shortage of quantity surveyors continuing to be highlighted.
“This chimes with the results of the recently released RICS Surveying Skills Report which not only points to capacity constraints but also draws attention to the impact this shortage is having on innovation in the industry.”
Modest improvements are expected in the next 12 months, with infrastructure leading growth expectations at +24%, down from +34%. Private residential and commercial expectations are muted.