Energy and property lead UK industry growth, pointing to real asset demand
Energy and real estate have recorded the strongest growth in business numbers in the UK over the past five years, according to research that points to a changing pattern of demand for property and infrastructure.
Electricity, gas, steam and air conditioning recorded average annual growth of 12.5% between 2020 and 2025, almost three times the 4.2% rate recorded by second-placed real estate, according to the UK Industry Growth Index compiled by Approved Business Finance using Office for National Statistics data.
Information and communication ranked third, at 3.5%, followed by human health and social work at 2.8%, water, sewerage and waste management at 1.8% and construction at 1.5%.
The findings have particular relevance for real asset investors because several of the fastest-growing parts of the economy are also intensive users of land, buildings, power and infrastructure.
Energy was the fastest-growing sector in nine of the 12 UK regions analysed, with particularly strong expansion in the East Midlands, South West and West Midlands. Growth in electricity demand associated with data centres, AI, electric vehicles and industrial electrification is increasing the importance of access to power in both corporate location and property investment decisions.
That relationship is becoming increasingly visible in the wider economy. The Bank of England reported this month that UK manufacturers supplying equipment for energy infrastructure and data centre projects are seeing growth, even as conditions remain weaker across parts of construction and manufacturing.
Real estate, meanwhile, ranked among the three fastest-growing sectors in eight of the 12 regions covered by the research, including London, the West Midlands and North East. At national level, the number of businesses in the sector grew by an annual average of 4.2% over the five-year period.
Other growth sectors point towards demand across a wider range of real assets. Expansion in health and social work has implications for healthcare and life-sciences-related property, while growth in information and communications increases demand for digital infrastructure alongside suitable office and R&D space. Water, waste and energy growth also reinforce the investment case for infrastructure assets supporting expanding businesses and populations.
Turnover data adds another dimension. Arts, entertainment and recreation recorded the strongest five-year turnover growth at 17.2%, followed by accommodation and food services at 11.7%, health and social work at 10.6% and construction at 9.6%. These sectors have direct implications for hospitality, leisure, healthcare and development assets.
The overall UK picture is more mixed, however. The total number of active enterprises in 2025 remained 0.55% below its 2020 level, despite returning to modest annual growth last year. Manufacturing, transportation and storage, financial services and mining all recorded declines over the five-year period.
Nor does growth in the number of construction and property businesses necessarily indicate a broad recovery in real estate development. Recent Bank of England intelligence points to continued pressure from financing and construction costs, planning constraints and weak development viability. Commercial real estate investment and development activity remains subdued, although demand for some sectors and assets is considerably stronger than others.
The sectoral divergence nevertheless provides an indication of where future demand for real assets may be concentrated. For investors and investment destinations, the growth of energy, technology, healthcare and infrastructure-related activities increasingly links economic development with questions of power availability, land, connectivity and suitable property — making real asset provision an important component of the UK’s ability to accommodate further business investment.
