At a glance
💰 New market outlooks show contraction in UK new-build work but continued resilience in infrastructure, industrial and public non-housing sectors.
🌱 Infrastructure is now the only part of construction recording positive activity, driven by energy and water, though momentum is softening.
💰 July’s steep steel tariff changes are set to raise UK floor prices, with material cost risk sharpening for live and future tenders.
🚆 The government’s £725bn 10-year infrastructure strategy and refreshed pipeline are reinforcing visibility around megaprojects and regulated programmes.
⚙️ A workforce shortfall of more than 250,000–266,000 workers threatens delivery just as HS2, RIS3, AMP8 and CP7 activity ramps up.
Today’s update: fresh data from Arcadis, RICS and others paints a picture of softening building workloads set against still-robust infrastructure and energy pipelines, but under intensifying cost and labour pressure. Government’s 10-year infrastructure strategy and pipeline tools continue to anchor demand, even as steel tariffs and workforce gaps threaten delivery economics. Here’s what you need to know to stay ahead today.
Ongoing Stories
Following earlier coverage of pipeline strain and skills risk, new Arcadis and RICS data confirm that infrastructure is now propping up overall construction output while workforce and productivity constraints persist. The latest forecasts sharpen the focus on delivery capacity rather than project availability.
Building on the Institution of Civil Engineers’ recent warnings about infrastructure delivery risks, the government’s 10-year infrastructure strategy and new asset condition index trial highlight a shift towards more data-led, long-term asset management to keep major programmes on track.
Top 5 Headlines
💰 UK new work pipeline contracts, but infrastructure and public sectors hold firm
Arcadis’ UK Construction Market Outlook Summer 2026 reports a contraction in new work across all sectors in Q1 2026, with only infrastructure, industrial and public non-housing segments showing relative strength. The outlook points to a bifurcated market where commercial and private housing soften while policy-backed programmes sustain activity. For contractors and suppliers, this implies intensifying competition for private work and a continuing tilt towards public and infrastructure frameworks. (Source: Arcadis)
💰 Steel tariff overhaul to lift UK floor prices from July
From July 2026, quotas on 20 steel products will be cut by 60% and tariffs lifted to 50%, a shift expected to push up UK steel floor prices. Analysts warn this will affect procurement strategies and could squeeze margins on steel-intensive schemes already in pre-construction. Clients and main contractors will need to revisit cost plans, risk allowances and indexation clauses, particularly on long-duration infrastructure and industrial builds. (Source: Arcadis)
🌱 Infrastructure now sole growth engine in RICS Q1 monitor
The latest RICS UK Construction Monitor for Q1 2026 shows infrastructure as the only sector recording positive activity, led by energy (+24%) and water/sewage (+20%), though it notes that momentum has eased. Other segments are flat or declining as higher financing costs and weaker demand feed through. This reinforces the centrality of regulated utilities and energy transition projects for workload planning into 2027. (Source: RICS)
🏛️ £725bn 10-year infrastructure strategy underpinned by new pipeline tools
Returning today in more detail, the UK government’s 10 Year Infrastructure Strategy sets out a £725bn long-term programme spanning housing, social and economic infrastructure. Work is under way on a refreshed infrastructure pipeline and a trial asset condition index to better guide where and when capital is deployed. For investors and delivery partners, this signals continued political backing for big-ticket programmes, but with greater scrutiny on asset performance and prioritisation. (Source: ICE Knowledge Hub, UK Government)
🚆 Megaprojects and energy schemes anchor the 2026–30 workload
Analysis across the sector highlights HS2, the Lower Thames Crossing, water industry AMP8 investment, RIS3 highways delivery and Network Rail Control Period 7 as core pillars of near-term activity. Energy infrastructure investment – including renewables and nuclear – is flagged as a key growth driver across civils, M&E and specialist trades. This concentration of demand around a handful of national programmes reinforces the importance of framework positions, alliance models and supply-chain resilience. (Source: PBC Today, Pinsent Masons)
⚙️ Forecast 2.8–4.5% growth in 2026 overshadowed by 266,000-worker gap
Industry forecasts suggest UK construction could grow between 2.8% and 4.5% in 2026, largely off the back of infrastructure schemes. However, a workforce shortage estimated at around 266,000 workers threatens to cap achievable output and inflate labour costs. Delivery teams will need to double down on retention, training, MMC and productivity measures to convert pipeline into deliverable revenue. (Source: Roofers Coffee Shop)
Also in the news
🚆 HS2, RIS3 and Network Rail CP7 are highlighted as emblematic of how transport megaprojects are now central to maintaining sector-wide order books into the late 2020s. (Source: Pinsent Masons)
🌱 Energy transition work – from renewables to nuclear – is cited as a primary driver of the positive infrastructure readings in the latest RICS data. (Source: RICS)
💰 Analysts note that softer demand in commercial and residential markets is increasing reliance on public-sector clients and regulated utilities to sustain workloads. (Source: Arcadis)
⚙️ Workforce constraints are expected to sharpen competition for skilled trades, with implications for programme durations and contract risk allocations. (Source: Roofers Coffee Shop)
🏛️ The trial of an infrastructure asset condition index is framed as a step towards more transparent, evidence-based prioritisation of maintenance versus new build. (Source: ICE Knowledge Hub)
The Daily Build is written for people shaping the UK’s construction and infrastructure pipeline, from boardrooms to site offices. If this briefing is useful, consider forwarding it to colleagues making decisions on bids, procurement and workforce planning.