At a glance
BCIS forecasts civil engineering costs up 15% and tender prices up 19% by 2031, with data centres a key driver of price pressure. (Sources: Construction Magazine UK, Consultancy.uk)
The UK’s 10-year infrastructure strategy confirms at least £725bn investment, hinging on faster planning and delivery reforms. (Source: UK Government)
Construction PMI for June sits at 38.4, signalling ongoing contraction despite a slight easing in the downturn. (Source: Reuters)
UK Energy in Brief 2026 confirms 2025 emissions at 407 MtCO2e, around 50% below 1990, with the Fourth Carbon Budget on track. (Source: DESNZ)
Today’s update: cost inflation, labour shortages and weak order books are colliding with an ambitious £725bn infrastructure plan and ongoing efforts to accelerate planning decisions. Data centres, clean energy and core social infrastructure are emerging as the main pressure points for capacity and price risk. Here’s what you need to know to stay ahead today.
Ongoing Stories
Following earlier coverage of skills and delivery risks around the UK’s £530bn–plus pipeline, BCIS’s new five-year forecast adds sharper numbers on cost escalation, warning that civil engineering costs and tender prices could rise by mid- to high-teens by 2031, compounding existing labour and productivity constraints.
Returning to the theme of planning reform flagged in recent analysis of the Planning and Infrastructure Bill, the newly published 10-year infrastructure strategy leans heavily on those faster-consent measures to unlock at least £725bn of projects across housing, transport, energy and social infrastructure.
Continuing the net-zero and grid-readiness thread, the 2026 Clean Flexibility Roadmap update and UK Energy in Brief reinforce that emissions trajectories and flexibility markets will be central to how quickly low-carbon infrastructure and data centre capacity can expand without overloading networks.
Top 5 Headlines
💰 BCIS sees civil engineering costs up 15% and tenders up 19% by 2031
BCIS’s updated five-year infrastructure forecast projects civil engineering costs rising 15% and tender prices 19% by Q1 2031. Infrastructure output is expected to grow just 1% in 2026, with new orders down 11.2% quarter-on-quarter in Q1 2026, indicating a softer near-term pipeline against a structurally higher cost base. Labour shortages and intense competition for resources from data centre schemes, particularly in London, Birmingham and Glasgow, are cited as key inflation drivers. For clients and contractors, this points to tighter margins, more selective bidding and a premium on early cost certainty for major civils and infrastructure packages. (Sources: Construction Magazine UK, Consultancy.uk)
🏛️ £725bn 10-year infrastructure strategy depends on faster planning
The government’s new 10-year infrastructure strategy commits at least £725bn of investment across housing, transport, water, clean and nuclear energy, schools, hospitals, digital networks, flood resilience, justice and defence. The strategy is underpinned by July’s planning reforms, which aim to cut pre-application times for major schemes by up to 12 months. Together they set a clearer long-term pipeline, but delivery will depend on whether the planning system and local capacity can absorb accelerated timetables. For the sector, this creates a stronger forward signal for investment but also raises expectations on programme management, consenting readiness and stakeholder engagement. (Source: UK Government)
⚙️ Data centres intensify labour and cost pressures in UK construction
New analysis highlights data centre construction as a major driver of cost escalation and labour shortages in the UK market. London remains the most expensive region, but secondary hubs such as Birmingham and Glasgow are also seeing heightened pressure as hyperscale and colocation projects ramp up. This specialist, MEP-heavy workload is absorbing skilled labour and pushing up prices beyond the immediate sub-sector. Contractors and investors across commercial, industrial and infrastructure segments will need to factor in this competition for talent and materials when planning bids, programmes and locations. (Source: Consultancy.uk)
💰 Construction PMI at 38.4 signals ongoing downturn despite easing
The latest June 2026 construction PMI reading of 38.4 remains well below the 50 growth threshold, pointing to continued contraction across the sector. While the downturn has eased slightly compared with previous months, the data highlights subdued new work and cautious client sentiment. Against the backdrop of rising input costs and a stretched labour market, the weak activity data suggests some schemes may be delayed, rephased or re-scoped rather than cancelled outright. This environment favours well-capitalised players and underscores the importance of robust cashflow and risk-sharing structures on live and upcoming projects. (Source: Reuters)
🌱 UK Energy in Brief 2026 confirms emissions cut by ~50% since 1990
The government’s UK Energy in Brief 2026 publication reports greenhouse gas emissions at 407 MtCO2e in 2025, around 50% below 1990 levels, with the Fourth Carbon Budget currently on track. The document also consolidates recent data on energy production, consumption, pricing and climate indicators. In parallel, the July 2026 update to the Clean Flexibility Roadmap sets out progress on grid flexibility and demand response mechanisms needed to integrate more renewables. For built environment investors and project teams, these signals reinforce that low-carbon generation, storage, flexibility services and energy-efficient assets will remain central to policy, regulation and investment flows this decade. (Sources: DESNZ, UK Government, CCC)
Also in the news
🚆 The 10-year infrastructure strategy reiterates digital infrastructure as a core priority alongside transport and energy, signalling sustained demand for fibre, 5G and associated civils works. (Source: UK Government)
🌱 The Environmental Improvement Plan’s latest progress update records incremental moves rather than major new policies for 3–4 August, but keeps pressure on water, nature and air quality schemes. (Source: UK Government)
🚆 Planning reforms confirmed in July aim to shorten pre-application periods for NSIPs, with government messaging over the past month emphasising faster decisions for energy, transport and water projects. (Source: UK Government)
🌱 The CCC’s 2026 progress report to Parliament underlines that while the Fourth Carbon Budget is on track, stronger near-term policy will be required to sustain emissions reductions beyond 2030. (Source: CCC)
💰 Official ONS construction output data for August 2026 is scheduled for October release, leaving firms reliant on PMI and internal pipelines to gauge market trajectory in the interim. (Source: ONS)
The Daily Build is written for people shaping the UK’s construction and infrastructure pipeline. If this briefing is useful for your next board or bid review, consider forwarding it to your team.