Market Intelligence Reports

Overview

Throughout Q3, NACF contractors and their trade supply chain reported cautious recovery. This cautiousness has continued into the final quarter of the year, where national tender workload increased by a minimal 0.74%.

Sustained national inflation, high interest rates, and complex regulatory environments has flooded the market with uncertainty and resulted in poor confidence to invest. As project teams navigate these complex conditions, the conversion of pipeline amongst the industry has been slow with preconstruction programmes extending as the viability of projects have been called into question.

However, NACF contractors have reported tender workload to increase by 2.81% when compared with the same time last year, demonstrating that although challenging conditions persist, new work opportunities within the public sector are slowly improving. This is supported by ONS data, where Construction New Orders increased by 9.8% on the year in Q3.

Building cost increased by 1.74% when compared with last quarter. Trade suppliers report that material prices have remained relatively consistent, but labour and employment costs have contributed heavily to this increase. The extent of Employment levels throughout Q4 has been limited at 0.45% as the impact of rises in national insurance contributions and minimum wage have begun to take effect.

On a more positive note, material availability has remained consistent when compared with last quarter, with only an average increase in lead time of half a week.

Looking into the year ahead, the national forecast to Q4 2026 anticipates growth:

· Tender Workload +4.60%

· Building Cost +4.11%

· Employment +3.18

· Material Availability +0.52 weeks

This growth may present a new set of challenges for 2026 and onwards as the capacity of the construction sector is tested. The need for strategic procurement and proactive risk management will be critical in drawing the attention of a broad selection of suppliers.

The need for predictable outcomes is crucial for public sector projects; Clients should consider the use of collaborative procurement models and early supply chain integration to help ensure opportunities of buildability and real-time cost advice are realised.