Q1 2026
Tender Price Indicator
The UK construction market enters 2026 with tender price inflation expectations edging higher. Activity continues to be supported by legacy workloads, but there are early signs that delayed schemes are beginning to re-engage, with potential for a more meaningful release of deferred projects later in 2026. Improving visibility on interest rates, greater post-Budget clarity and gradual easing in approval processes are starting to support viability discussions, particularly for well-structured schemes.
Macroeconomic conditions continue to weigh on confidence, but the policy backdrop is gradually becoming more supportive, with the direction of travel tilted towards easing and the Bank of England signalling further rate cuts through 2026. While financing conditions remain restrictive, improvements on the cost of capital is beginning to stabilise sentiment and reduce downside risk to scheme viability — an important shift after two years of heightened uncertainty.
Market conditions remain selective and increasingly two-speed. Competitive tension and margin pressure persist across private building sectors, limiting the scope for demand-led inflation despite ongoing cost pressure. By contrast, activity in public and regulated infrastructure markets is providing firmer workload visibility, where scale and programme certainty are supporting pricing in capacity-constrained specialist trades.