Market Intelligence Reports

The Q1 2026 construction market has entered a period of renewed volatility, driven by geopolitical instability and disruption to global energy markets, trade routes and investor confidence. This quarter our Contractors report rapidly changing conditions, with pricing and material availability now requiring weekly monitoring. While tender activity has increased, project conversion remains inconsistent due to viability pressures, particularly in the residential sector, alongside a continued misalignment between design ambition, sustainability targets and budget constraints, which is extending pre-construction periods and driving repeated value engineering.

Cost pressures remain elevated, with construction inflation outpacing headline rates and key materials, particularly steel, experiencing ongoing volatility linked to energy costs, supply chain disruption and trade measures. Contractors are responding through more collaborative procurement approaches and early engagement to manage risk and maintain resilience. At the same time, proposed government intervention, announced in the King’s Speech at the State Opening of Parliament, including legislation to enable the potential nationalisation of British Steel, highlights the strategic importance of domestic supply; however, while this may support long-term stability, the outlook remains active but fragile, with continued uncertainty around pricing, capacity and delivery.

Looking ahead to 2027, the next 12 months are expected to see increasing workload alongside sustained cost pressure and constrained supply chain capacity, reinforcing the importance of early engagement and proactive risk management. While some stabilisation may emerge as delayed projects progress, market conditions are likely to remain sensitive to geopolitical developments, energy prices and policy interventions.

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