Construction was the worst performing segment of the economy in October, new data from the Office for National Statistics (ONS) has shown.<\/p>\n
Output in the sector fell by 0.6 per cent in the month, helping to defy economists\u2019 expectations and bring national gross domestic product (GDP) down by 0.1 per cent.<\/p>\n
The services sector fell by 0.3 per cent, while production grew by 1.1 per cent in the month, the ONS said.<\/p>\n
Compared with the prior three months, construction output also fell in the three months to October 2025, dropping by 0.3 per cent in the quarter. It had grown by 0.1 per cent in the three months to September 2025.<\/p>\n
Repair and maintenance work decreased by 1 per cent, with private housing repair and maintenance the worst part of the sector, falling by 2.3 per cent.<\/p>\n
However, compared with the three months to September 2024, construction output grew by 1.1 per cent, the statistics body said.<\/p>\n
Julie Palmer, managing partner at insolvency specialist Begbies Traynor, said a significant factor in the performance was uncertainty about what would be in November\u2019s Budget.<\/p>\n
\u201cThough it desperately needs to get back on its feet, the true impact of decisions made by the government on the construction industry are still waiting to be felt in full,\u201d she added.<\/p>\n
\u201cEven the bigger players who have been posting profits may start to feel the pinch if their supply chains start to collapse. And the risk is that low confidence will keep growth for the sector slow, pushing vital, small businesses with talented workers towards closure at a time when big firms with big projects need them.\u201d<\/p>\n
She said the sector wants to see policy decisions to help tackle rising costs, materials inflation and skills gaps.<\/p>\n
\u201cThis must go hand in hand with wider policy designed to jump-start the property market by increasing buyer confidence and demand and addressing the barriers and challenges plaguing the homebuying market,\u201d she added.<\/p>\n
Palmer called on firms themselves to prioritise their financial resilience to counter cost increases and HMRC\u2019s work to recover unpaid tax, by pursuing realistic profit margins and, if necessary, borrowing against assets to create cashflow.<\/p>\n
National Institute of Economic and Social Research associate economist Fergus Jimenez-England said contractions in both construction and services show the economy has a broad weakness, potentially due to uncertainty before the Budget.<\/p>\n
He added: \u201cRecent survey data points to continued sluggishness for the remainder of the quarter, though with the Budget now behind us, there is scope for improvement in December.<\/p>\n
\u201cLooking ahead, the Autumn Budget\u2019s doubling of fiscal headroom should help reduce uncertainty over the coming year. Whether that will translate into stronger economic activity remains to be seen.\u201d<\/p>\n