Meeting uncertainty with agility

Trade tariffs, recently imposed by the US, are likely to have an adverse impact on UK construction. The emerging global trade war and uncertainty surrounding trade relations could have an inflationary effect, making materials imported into the UK more expensive. That said, we may see a redirection of supply from the US to other markets, which could conversely see the price of steel and other metals available from China fall. Uncertainty has also sent equity markets falling and is likely to negatively affect general business confidence and investment.

The Office for Budget Responsibility (OBR) recently halved the UK’s 2025 growth forecast from 2.0% to 1.0%. However, it also revised its forecasts for the rest of the decade upwards. This uplift is partly due to planning reforms, which should boost housebuilding and sector growth.

Even without global trade tariffs, economic recovery is proving slower than expected. Interest rates are gradually easing, but they are unlikely to fall below 4% before the end of the year, limiting the pace of private-sector investment. This cautious investment climate is contributing to a more measured approach to project delivery. More schemes are progressing with a stage-by-stage approach. While this mitigates risk in the short term, it can make it harder to get contractor buy-in and maintain delivery momentum.

Contractors are acutely risk-aware, particularly around cost inflation and contract pricing. This makes achieving financial close on large-scale projects a significant challenge.

To navigate these conditions, the industry must keep a close eye on risk, engage early with supply chain partners, and adopt flexible procurement strategies. Strong financial planning, adaptable project structuring, and securing expert insights will be key to keeping projects on track and commercially viable. In this evolving landscape, those who are agile and innovate will drive successful project outcomes and long-term sector growth.