Over the period, new work increased by 1.0%, while repair and maintenance edged up by 0.1%. At a sector level, four out of the nine industries recorded growth, with the strongest contributions coming from private housing repair and maintenance (up 3.8%) and infrastructure new work (up 2.1%).

On a monthly basis, construction output increased by 0.2% in July 2025, following a 0.3% rise in June. The July uplift was driven solely by new work, which grew by 0.3%, while repair and maintenance remained flat.

Clive Docwra, managing director of property and construction consultancy McBains, noted that the sector would welcome the rebound in new work but warned that housebuilding continues to underperform: “After June’s figures showed a fall in new orders, the sector will welcome that July saw an increase in new work, albeit moderate.

“The industry will be encouraged that the three months to July showed an increase in terms of infrastructure new work, but a concern is that housebuilding remains sluggish, which puts the government’s target of building 1.5 million homes under threat.

“There is still underlying confidence within the industry that the medium-term outlook for growth remains encouraging, but many firms will still have to navigate the headwinds of uncertainty over the next few months.

“For instance, as recent analysis we carried out found, current market conditions mean more developers are expected to continue to push forward with major commercial projects on a stage-by-stage basis to provide cover for concerns over costs and pricing.”

Jo Streeten, managing director at AECOM (Building + Places), echoed that the growth offers some optimism but stressed that the sustainability of the recovery depends on new orders and government priorities: “A second consecutive month of rising construction output is a welcome lift after a sluggish summer and a sign that confidence is beginning to edge back into the market. Firms will take some optimism from the shift, but the real test will be whether growth in new orders follows as we head into the Autumn.

“Last week’s cabinet reshuffle provided a glimpse into the government’s ‘phase two’ priorities, which must include implementing the 10-year infrastructure strategy. Backed by £725 billion of public investment, the ability to bring in additional private capital will be key.

“However, after a challenging year so far, many in the sector will be looking to secure more short-term wins in the face of ongoing market pressures with costs and cash flow being tightly managed in the months ahead.”

Richard Cook, senior economics director at Pegasus Group, highlighted the political and economic backdrop, cautioning against complacency: “The Government is desperate for good news at the moment, and this morning’s construction output data showing an increase for a second month in a row will be a welcome boost. Whilst this could be a sign of the dark clouds hanging over the sector finally passing, the multitude of economic challenges plaguing the sector remain and mean any self-celebrations from the Government should be halted in their tracks.

“Construction output is just one piece of the puzzle, and whilst their increase is a positive and very welcome indicator, it’d be wrong to assume the UK construction industry is fighting fit. Past today’s headline figure, low productivity growth across almost the entire economy, a tough graduate jobs market, labour shortages in construction and concerns about looming tax rises in the upcoming Budget are all contributing to the sombre economic mood.

“If the Government were to make progress on addressing these challenges, it will actually help boost growth in the construction sector which in turn can help UK plc and give more money to the government to invest in growth.

“Only through making progress on addressing these various challenges will the construction sector be able to turn the corner and start taking strides towards its 1.5 million new homes target. For now, this goal is merely a wishful economic fantasy.”