Q2 2026
Tender Price Indicator
The UK construction market moves through Q2 2026 in a more risk-sensitive position than at the start of the year. Earlier signs of improving momentum have been disrupted by renewed energy and geopolitical volatility, most notably due to the Middle East conflict. Softer demand, delayed project conversion and increased competition for workload continue to restrain pricing, but fuel, energy, shipping, metals and risk premiums are reintroducing upward pressure across selected packages.
Our current forecast uplift is not being driven by stronger underlying demand, nor does it represent a repeat of the 2021–22 materials shock. Material availability is better, labour supply is more balanced and main contractor OH&P remains largely stable. However, contractors and suppliers are becoming more cautious around their fixed-price exposure, quote validity, long procurement durations and energy-sensitive packages. Pricing pressure is emerging less through margins and more through preliminaries, package rates, risk allowances and selective supplier notifications.
These inflationary pressures are being partly offset by demand-side relief, as project starts slow and more cautious design reviews push out procurement. Contractors are willing to fix pricing, absorb short-term volatility, or accept capped inflation mechanisms where pipelines are thin, teams are becoming available and projects offer credible forward workload.