Introduction
Get ready for a year of change, challenge and opportunity in construction
Geopolitical shifts, growing protectionism and economic uncertainty are likely to disrupt supply chains and increase prices. We expect costs to rise by up to 7% in 2025. Material prices are stabilising, but labour shortages remain a concern. Opportunities are out there: the boom in digital infrastructure and renewable energy will continue, driven by growing demand.
Introduction
Get ready for a year of change, challenge and
opportunity in construction
Geopolitical shifts, growing protectionism and economic uncertainty are likely to disrupt supply chains and increase prices. We expect costs to rise by 2-6% in 2025. Material prices are stabilising, but labour shortages remain a concern. Opportunities are out there: the boom in digital infrastructure and renewable energy will continue, driven by growing demand.
In 2024 we identified three dominant long-term trends that are shaping the construction industry, and continue to evolve:
Digitisation
The digital revolution is reshaping the construction industry in many ways and the tech race shows no sign of slowing. Massive growth in high tech, including AI, is creating a wealth of opportunities across the construction industry, but this isn’t without challenges. High demand requires careful planning to mitigate material and labour shortages. Meanwhile the rapid evolution of technology is ushering in a new era of construction, characterised by robust data analytics and innovative, intelligent construction methods.
New ways of working
Shifts driven by new technologies. Greater collaboration and innovation will be required to adapt to changes in supply chain and labour availability. Smart data analytics, paired with in-depth knowledge and expertise, will help projects to adapt to sustainability requirements and cost constraints without sacrificing scope.
The need for sustainability
Across multiple sectors and multiple regions, the growing incentives and investment available for sustainable practices and renewable energy present significant opportunities. However, stringent regulations and increased scrutiny pose substantial risks for those who fail to embrace net-zero principles.
These shifts have only intensified, and the pace of change will be faster than ever. Those who understand the scale of potential risks, adapt and build resilience will be the leaders of tomorrow.
Global heat map
Heat map showing anticipated construction cost escalation in 2025. We predict that construction costs will increase across every one of our operating regions in the year ahead. The extent of these varies from market to market, but common drivers are clear.