IoD press release Construction challenges threaten UK’s growth ambitions
Commenting on ONS data that showed GDP showed growth of 0.1% in August 2025, following revised growth of -0.1% in July, Anna Leach, Chief Economist at the Institute of Directors, said:
“At headline level, the economy held up reasonably well over the summer, with steadier growth replacing the tariff-driven momentum seen earlier in the year. But the underlying picture is more mixed. Consumer services picked up slightly in August, helped by retail, yet the three-month trend remains negative as households see real income gains eroded by persistent inflation and weak confidence ahead of the Budget. Manufacturing output, meanwhile, remains flat and volatile, reflecting the pressure of a challenging global environment, alongside domestically-driven cost pressures.
“The underlying trends in construction are particularly worrying. The sector is already contending with acute skills shortages, rising costs and long delays at the Building Safety Regulator. Added uncertainty over potential housing tax changes in the forthcoming Budget is further weighing on housing demand. Unlocking infrastructure and housing delivery is critical to the UK’s growth future. The Budget must tackle systemic barriers head-on – accelerating planning reform, strengthening skills support, alleviating cost pressures and delivering long-term stability for the industry.”
