The UK’s construction activity is stabilising, but recovery remains uneven. Weak new orders, cautious private-sector investment and tight project viability continue to constrain residential and commercial markets, while transport, energy, utilities and digital infrastructure provide greater resilience.

Download WSP's Construction Market Intelligence Report for expert analysis, forecasts and practical insight to help inform investment, procurement and planning decisions.

 

Key takeaways

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Market is stabilising, but recovery remains weak and uneven.

 

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Infrastructure, utilities, energy and data centres are carrying the market.

 

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Demand is the biggest challenge, not cost inflation.

 

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The AI boom is creating a major new construction opportunity.

 

WSP’s Construction Market Intelligence Report examines a UK market that is stabilising amid continued uncertainty. It explores demand, cost and tender-price trends, as well as the sectors creating resilience—from transport and energy to water, utilities and digital infrastructure. It also considers the risks shaping project decisions, including weak private-sector demand, commodity volatility, specialist skills and delivery capacity.

This report provides a timely view of the factors shaping the market and the implications for projects planned over the coming months and years.

 

Why download the report?

The Construction Market Intelligence Report brings together the latest market data, forecasts and expert analysis, covering:

  • UK construction demand and pipeline activity
  • Labour market trends and workforce pressures
  • Materials and commodity price movements
  • Tender price intelligence and cost forecasting
  • Inflationary pressures affecting projects and programmes
  • Supply chain and procurement considerations
  • Market outlook and emerging risks.

 

Executive Summary 

Weak demand and falling new orders continue to outweigh cost pressures, delaying a broad-based market recovery

The UK construction market remained challenging in Q3 2026, with low levels of new work, cautious private investment and strong competition for projects continuing to limit recovery. While infrastructure, energy, utilities and data centre projects have supported activity, most contractors remain focused on securing workload rather than improving margins.

Recent data shows construction output grew by only 0.3% in Q2 2026, while new orders fell by 11.8%, signalling a weak pipeline of future work. Infrastructure was the strongest-performing sector, but residential, industrial and parts of the public sector continued to struggle.

As demand remains subdued, market conditions generally favour clients. Although labour and material costs remain elevated, contractors have limited ability to pass these costs on, resulting in relatively modest tender price growth. BCIS forecasts new work output will decline by 2.7% in 2026, with only modest growth expected from early 2027.

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Access the full Construction Market Intelligence Report to explore detailed market analysis and expert commentary from WSP’s Cost Intelligence specialists.