At a glance
💰 The UK construction market is expected to top £390bn in 2026, with infrastructure driving growth against weaker private housing.
🏛️ Major regulatory changes – from tighter CIS rules to a planned ban on retentions – are reshaping commercial risk for contractors and clients.
🚆 More than £200bn of megaprojects are in play across energy, transport and housing under a £725bn 10‑year infrastructure strategy.
🌱 Energy price cap reductions and grid charging reforms are altering the economics of energy demand, supply and connection pipelines.
⚙️ Industry awards and MMC initiatives highlight innovation even as labour shortages and capacity constraints threaten delivery.
Today’s update: despite no single headline-grabbing announcement on 22–23 April, the scale of committed public infrastructure spend, regulatory reform and market demand is defining the operating environment for the rest of 2026 and beyond. Growth is increasingly tied to infrastructure and energy, while policy on payments, tax and safety tightens around delivery models. Here’s what you need to know to stay ahead today.
Ongoing Stories
🏛️ Building on earlier updates on construction law and regulation, the latest CIS reforms effective 6 April 2026 introduce tighter fraud controls and expanded reporting, while government proposals to ban retentions and cap payment terms signal a structural shift in cashflow and risk allocation. (Sources: Walker Morris, Osborne Clarke)
🚆 Returning to the long-term infrastructure strategy theme, the government’s £725bn 10‑year plan and more than £200bn of active megaprojects – including HS2, Sizewell C and emerging SMR and data centre schemes – continue to underpin workload despite near-term news being thin. (Sources: Barbour ABI, Slaughter and May)
🌱 Energy market reform, previously highlighted through planning and grid discussions, now includes a 7% cut to Ofgem’s price cap and new usage/location-based network charges from April, which will influence energy efficiency, retrofit demand and investment in generation and storage connections. (Source: Ofgem)
Top 5 Headlines
💰 Infrastructure-led growth set to push UK construction above £390bn in 2026
Forecasts suggest the UK construction market will exceed £390bn this year, with overall output growth in the 2.8%–4.5% range. Infrastructure is the main driver, while private housing remains weak and RM&I accounts for roughly 44% of workload, supported by retrofit and upgrade programmes. More than 266,000 additional workers are required to meet demand, highlighting a capacity gap as major schemes ramp up. This matters because contractors and clients will be chasing growth in infrastructure and refurbishment while managing acute labour constraints and housing market drag. (Sources: ONS, Arcadis, Freemont Building Ltd, BCIS)
🚆 £725bn 10‑year UK infrastructure strategy underpins 2026 megaproject pipeline
The government’s 10‑year infrastructure strategy, with around £725bn of funding, continues to prioritise energy networks, transport and housing. Over £200bn of megaprojects are active or starting in 2026, including Sizewell C (c.£20bn), HS2 works backed by £25.3bn of funding for 2026–2030, early works at Wylfa for SMRs, and large solar and data centre schemes. Returning today as the core demand story, this pipeline sets a long-term floor under civils and energy workloads and will shape where capacity, capital and skills are deployed. (Sources: Barbour ABI, Pinsent Masons, Slaughter and May)
🏛️ CIS reforms and proposed ban on retentions tighten compliance and cashflow
From 6 April 2026, Construction Industry Scheme changes introduce tougher rules on compliance, fraud prevention and reporting, with new penalty risks for non-compliant businesses. In parallel, government plans to outlaw retentions in construction contracts and cap large firms’ payment terms to smaller suppliers at 60 days, backed by interest penalties for late payment. This matters because commercial models, supply chain liquidity and back-office compliance will need rapid adjustment, particularly for tier 1s and their subcontractor networks. (Sources: Walker Morris, Osborne Clarke, GOV.UK)
🌱 Energy price cap cut and charging reforms reshape demand and connection economics
Ofgem’s energy price cap has been reduced by 7% for 1 April–30 June 2026, lowering the typical household bill by about £117 a year amid falling wholesale gas and power prices. At the same time, network charging reforms have replaced the Triad methodology with new usage and location-based tariffs, while grid reform aims to accelerate connections for 132GW of generation and storage by 2030. For the built environment, this influences business cases for efficiency upgrades, on-site generation, and the timing and siting of new energy and storage projects. (Sources: Ofgem, Cornwall Insight, Smart Energy UK)
🏛️ Building Safety Levy due October 2026 adds new cost layer to residential schemes
From October 2026, a Building Safety Levy will apply to certain residential developments in England to help fund remediation of unsafe buildings. The levy forms part of a wider package of building safety and construction product oversight reforms introduced earlier in 2026. This is significant because viability calculations, land bids and scheme phasing for residential projects – especially high-rise and multi-unit schemes – will need to accommodate the new tax and compliance obligations. (Source: GOV.UK)
Also in the news
⚙️ Labour shortages remain a binding constraint with more than 266,000 additional workers needed, reinforcing the importance of MMC, productivity gains and targeted recruitment in 2026–2030 delivery plans. (Source: Arcadis)
🏗️ Construction product safety and oversight reforms announced earlier in 2026 are bedding in, adding further scrutiny to materials selection and supply chains alongside the Building Safety Levy. (Source: GOV.UK)
🚆 HS2 remains a major workload anchor with £25.3bn of government funding profiled for 2026–2030, sustaining demand for civils, rail systems and associated development despite political debate around scope. (Source: Pinsent Masons)
🌱 CfD Allocation Round 7 has secured around 7.5GW of offshore wind and other renewables capacity, supporting the supply chain even though overall volumes fall short of the UK’s Clean Power 2030 targets. (Source: Slaughter and May)
⚙️ The Industrialised Construction Awards and Digital Construction Awards 2026 spotlight projects such as Oxford’s Stephen A. Schwarzman Centre and Birmingham’s Molecular Sciences Building, underlining client appetite for digital design and offsite delivery on complex schemes. (Sources: Construction Leadership Council, Construction Management)
The Daily Build is written for decision‑makers across UK construction and infrastructure. If this briefing sharpened your view of the 2026 landscape, consider forwarding it to your project, investment or bid teams.
To stay aligned on risks and opportunities, keep this update handy for your next pipeline or board discussion.