What trends and challenges will shape the construction industry in 2025?

The construction sector is gearing up for a transformative 2025, marked by increasing demand for housing, infrastructure, and commercial projects. Sustainability and digital transformation stand out as key themes shaping the coming months, while evolving regulation and ongoing skill shortages present challenges.

In November, London Belgravia’s Commercial Director, Alex Lyons, joined the final Voices in Construction Insight Panel of 2024, hosted by BCM Agency. This event gathered leading experts to discuss the challenges and opportunities facing the construction industry as it heads into 2025.

This inspiring group included David Aitchison (BCC Consultancy), India and Lawrence Brenchley (Hatfield Interiors), Joanne Broadley (Modulyss), Michael Chilaka (Cooperman & Goldberg), Sarah Mason (Kier Group), Nick Reilly (Sustainable X), and Alan Unwin (Cetetherm).

BCM captured the key areas of discussion, offering valuable insights for those in the construction industry. We highly recommend reading the full report, which we’ve summarised below.

Technology and AI transforming construction and risk management

Digital tools and artificial intelligence (AI) are set to revolutionise construction processes, with a focus on efficiency, risk management, and sustainability. AI applications include programming, delay prediction, robotics for heavy tasks, and risk management through camera-based systems. The panel was overwhelmingly optimistic about the role of technology and AI in transforming construction practices. Kier Group Senior Business Development Manager, Sarah Mason noted: “AI is already being used to anticipate potential delays and provide early warnings on site. This will only grow in 2025.”

AI’s influence extends beyond project planning. London Belgravia’s Alex Lyons highlighted its vital role in enhancing risk management: “Whilst the human element isn’t going to be completely removed”, he said, “I agree that camera-driven AI, which is watching what the human is seeing, will become more and more useful in managing risk by checking that the right procedures have been followed, or that the right materials have been used, for example.

Connectivity will be vital in delivering resilience – “We need to build more resilience into buildings and into infrastructure assets,” Alex remarked. “Equipping them with sensors and monitors will be key to achieving this and getting us away from situations where a tower block has had a leak from the 40th floor for three years but nobody has noticed, and the damage is already done.”

Climate resilience and demonstrating sustainability

The panel emphasised that sustainability will dominate the construction agenda in 2025. This year will see designers and architects focus on whole-life cost assessments and require evidence of sustainability certifications – e.g.  Environmental Product Declarations (EPDs) – as the industry looks to demonstrate real impact. The circular economy will drive innovation, with a focus on end-of-life reuse and recyclability, while bio-based and lighter materials can help reduce embodied carbon and transportation emissions.

Hatfield Interiors’ Director, Lawrence Brenchley, shared the shifting view of what it means to be cost effective “Design teams are moving away from focusing on upfront costs and prioritising long-term durability and value”. Yet, challenges remain. Sarah Mason pointed out that private developers often favour short-term monetary gains, making it difficult to prioritise sustainable practices.

Alex took the pragmatic view that the only realistic way the construction industry will be able to meet the demand for housing and hit sustainability targets at the same time is likely to be through the use of modular building methods, but he also pointed out some serious concerns.

Systemic defects, for example, can be a particular weakness of modular approaches, because many thousands of the same component can be manufactured with the same defect. This presents a real challenge for insurers.

This becomes even more of a worry, Alex said, when changing climate conditions are taken into account. “We need to bear in mind,” he pointed out, “that changing weather conditions will mean we have to expect more from all our buildings, modular and otherwise, in terms of their ability to stand up to greater heat, higher water tables, flooding, and so on. This is one of the reasons why I think we’ll see resilience become a much bigger topic in 2025.

Persistent challenges: Regulatory change and skills shortages

Labour and skills shortages remain one of the biggest challenges for the construction industry as it enters 2025, impacting manufacturing and project timelines. Rapid regulatory changes will continue in 2025, and the need to increase specialist skill sets to deliver the increased compliance and safety requirements is highlighting the issues the industry faces with an ageing workforce and shortages of experts in areas such as Building Control. If the construction industry wants to embrace digital transformation and drive sustainability, it is vital the industry tackles the ongoing skills crisis head-on.

Cooperman & Goldberg Director, Michael Chilaka, emphasised the benefit of training to bring new talent into the industry and to “motivate people to stay with us and grow with us. But again, AI potentially has a role to play here, because it can enable people to learn quicker. If you train your people to embrace AI, it can potentially diversify their skill set, and you could have one person able to do many different things.”

The panel urged greater investment in training and education, with innovative teaching methods required to make the sector more accessible and appealing to new entrants.

Learn more about how London Belgravia Group supports its team through professional development and training: Empowering growth – Alex Limpenny on building careers at London Belgravia

Adapting to change: Shaping a resilient future

The construction industry in 2025 will face significant challenges alongside exciting opportunities. Sustainability and digital transformation are identified as the primary drivers shaping the industry’s future. These priorities demand immediate action to ensure readiness for a transformative era and the panel stressed the importance of leaders taking proactive strategies. Businesses must focus on what they can and cannot control while preparing for 2025, reviewing both opportunities and risks regularly to ensure critical issues are addressed regularly.

London Belgravia Group’s team works as trusted advisers for our clients, ensuring seamless project integration and management. We offer a range of insurance and financial products to help protect developments. Our team of expert consultants work closely with developers and contractors to help navigate challenges should they arise. Through partnerships with specialised consultants, London Belgravia connects clients with experts across a range of services including building control, fire safety consultancy, and structural engineering, helping clients access the essential support needed to navigate complex projects successfully and seize the opportunities.

Thanks again to BCM for hosting this panel. Read the full report here: Voices in Construction – Exploring Construction Themes for 2025

Let’s work together – get in touch to learn more about how London Belgravia can support your next project.

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