Issue 492 | 11 August 2025 - Turner & Townsend alinea

UK construction and property

Red flags | In its latest Red Flag report, Begbies Traynor noted that 102,285 construction companies faced “significant” distress at the end of Q2, a 14% increase in the past year. The number of construction firms in “critical” financial distress has also risen. Plumbing, heating, electrical, and air-conditioning installation companies saw a significant increase in distress.
Construction starts rose 9% both quarter-on-quarter and compared with the same period last year, according to Glenigan. Residential construction was the strongest performing sector: private housing grew while social housing starts fell sharply. Non-residential construction rose 7% quarterly but slipped 1% annually, with a strong performance in commercial office schemes. The West Midlands saw the biggest improvement, with the southeast, northwest, east of England, and Yorkshire all recording quarterly and annual gains. London starts rose by 13% over the previous quarter but finished 10% below 2024 levels.
Construction output recorded a “considerable slump,” according to S&P, whose PMI index fell to 44.3, well below the neutral mark. It attributed the fall to site delays, less new business, and low confidence.
CITB pilot scheme | The CITB has launched a £250,000 pilot scheme to upskill façade installers and supervisors, aimed at boosting façade remediation work across the UK.

EU countermeasures | The EU will suspend its two packages of countermeasures for six months following a trade agreement. The countermeasures are in response to US steel and aluminium duties, and the other pertains to the baseline rate and car tariffs.
Chinese exports rose 7.2% in July, an improvement from the 5.2% in the previous month, with an increase in shipments to the EU and other markets that offset the drop in shipments to the US. US-bound goods fell by 21.7% year-on-year, while exports to the EU jumped 9.2%, and those to the Association of Southeast Asian Nations rose 16.6%.
US manufacturers have blamed tariffs for falling activity in a survey of purchasing managers compiled by the Institute of Supply Management (ISM).

UK services | The S&P Global latest PMI fell from 52 in June to 51.5, which is still positive, but marked a slowing of expected growth. Total workforce numbers across the service sectors also decreased, indicating that the UK jobs market is struggling.
Recruitment | According to a survey by KPMG and the Recruitment & Employment Confederation, recruitment activity remained at a near two-year low. Its permanent placement index fell to 40 in July, below the neutral marker of 50.0.
Interest rates | The Bank of England has cut interest rates from 4.25% to 4%. Despite the fall in interest rates, inflation is expected to rise to 4% in September, according to August’s monetary policy report. This is partly due to increases in energy prices, food prices, and some regulated prices such as water bills.
Tax concerns | The National Institute of Economic and Social Research (NIESR) has recommended a “moderate but sustained increase in taxes” at the autumn budget, saying that the government is on track to miss its self-imposed fiscal targets.
Rents | Average private residential rents have fallen in Britain for the first time in five years. Estate agents Hamptons say that the fall is due to lower mortgage rates.

Oil | Higher U.S. tariffs against a host of trade partners have raised concern over economic activity and demand for crude oil; yet, earlier this week, OPEC+ agreed to boost oil production, citing a steady global economic outlook and low oil inventories.
Concrete | According to the Mineral Products Association (MPA), the sale of ready-mixed concrete has fallen to levels not seen since the early 1960s, with volume dropping by 11.5% to 2.7 million cubic meters in Q2 2025. The MPA attributed the drop to potential infrastructure projects being held back by slow, delayed, or deferred investment decisions, cost pressures, and a sluggish regulatory process.
Bricks | The UK saw a drop in the number of bricks, gravel, and cement blocks sold in June. It was only the second time less than 10 million tonnes were sold in a quarter since records began in 2012, with the other occasion being in Q2 2020.
Strong timber | A U.S. firm, InventWood, has developed Superwood, a modified wood that it claims is stronger than steel.
Bioethanol | Britain’s largest bioethanol plant is losing around £3 million a month and faces closure within days due to challenges from cheaper imports, which are further worsened by the US-UK trade deal. E10 petrol is 10% ethanol from renewable sources.

Plastic pollution | The UN Environment Assembly has met in Geneva from the 5th to the 14th of August, with the aim of creating a legally binding treaty to end plastic pollution. The WEF Global Risk Report 2025 ranked pollution among the top 10 risks with the most severe expected impact over the next decade.
Food security | Analysis by the Energy and Climate Intelligence Unit found that £3 billion of UK food imports come from the top 20 countries for internally displaced people due to extreme weather. It’s estimated that climate change has added £361 to every UK household’s food bill.
Hot homes | The UK Green Building Council has warned that we “are facing a climate brutality” and a temperature of 28C inside the home is likely to become the norm in London and the south east.