TPI Survey Feedback

WORKLOAD

Workloads remain broadly stable as contractors continue to work through established pipelines, but the flow of new opportunities is noticeably thinner. Slower conversion of schemes from feasibility into delivery is stretching the pre-construction phase, as some clients wait for clearer visibility on investment conditions, regulatory requirements and forthcoming fiscal policy. Pre-Budget uncertainty is contributing to hesitation at board level, with a number of schemes being held until after the Autumn Statement sets out capital spending priorities and potential planning reform.

Residential continues to be one of the softer areas of the market. High-rise remains constrained by gateway processes and viability pressures, while low-rise suburban schemes and PBSA show relatively better momentum. London’s housing market is especially subdued — limiting national recovery prospects, as the capital typically drives private-sector expansion.

The commercial sector presents a more two-speed picture. Fit-out and refurbishment activity remain comparatively robust, supported by leasing churn, ESG repositioning, and the desire to retrofit rather than develop anew. However, new-build commercial schemes are slower to mobilise and more vulnerable to delayed decision-making, with several projects being re-scoped or phased to limit near-term capex exposure. Life sciences remains active but is now more dependent on funding approvals rather than demand signals alone.

Across energy, utilities and infrastructure, the workload outlook remains more resilient. Regulated investment cycles and decarbonisation drivers — particularly in water (AMP), power networks and renewables — are helping underpin pipeline continuity. Major projects and defence programmes are also progressing, though public building work is encountering tighter scrutiny on capital allocations. Meanwhile, healthcare remains constrained by funding approvals, causing a stop-start pattern rather than sustained delivery.

While many main contractors remain well covered into mid-2026, this is rooted in legacy workload rather than new wins. As these schemes taper and fewer major projects move through gateway approvals, gaps are beginning to appear later in 2026 and into 2027. There are signs of future growth in the pipeline, but conversion remains slow and uneven, leaving the recovery path uncertain. As a result, some contractors are increasingly shifting from selectivity to pipeline protection — providing earlier cost support, leaning into feasibility-stage engagement and broadening their pursuit of opportunities to secure continuity rather than expansion.

Overall, the expectation is a broadly flat workload profile through the remainder of 2025, followed by gradual improvement from 2026 if confidence strengthens after the Budget and delayed schemes begin to move. The focus remains on pipeline continuity and risk management, rather than expansion, as the industry awaits firmer signals of recovery.

MARKET CONDITIONS

Market activity remains steady, but confidence has softened, and decision-making has moved into a more defensive posture as firms wait for clearer economic and policy signals before moving forward.

Tendering conditions continue to intensify across much of the market. Pricing on refurbishment and mid-scale schemes is becoming sharper as contractors prioritise pipeline continuity and respond to demand. That said, commercial discipline remains: high-risk or poorly structured opportunities are still being declined and contract terms increasingly dictate bid/no-bid decisions.

Underlying cost pressure has eased from the peaks of 2022–23 but remains embedded in the system. Wage growth and compliance-related overheads — particularly around fire safety, sustainability and digital assurance — continue to squeeze margins. Cash flow across the supply chain remains vulnerable, with heightened scrutiny on sub-contractor robustness and liability protection. Persistently elevated inflation expectations are also anchoring caution among investors, limiting appetite for major commitments until confidence improves. And delivery risk is rising lower down the supply chain, where financial stress is increasingly visible.

The real friction in the market is conversion, not enquiry. Tendering volumes remain moderately healthy, but schemes are taking longer to reach award as viability testing, governance checkpoints and commercial negotiations stretch out. Many contractors describe the landscape as “active, but slower and stickier” — with a growing proportion of tenders that do not yet feel ready to proceed.

Policy uncertainty has become a major gating factor. The Autumn Budget has created an information vacuum, delaying final sign-offs until capital allocations, tax measures and planning reform intentions are clearer. The result is activity that looks busy but doesn’t fully commit.

Survey sentiment captures the shift in tone: expectations for the next six months have slid modestly towards more competitive and lower-activity conditions.

Delivery is supported by schemes already in flight, yet the outlook beyond mid-2026 is less secure as fewer major projects progress through approvals. Spatial divergence is also widening. Regions tied to energy transition and regulated infrastructure show more resilience, while London and South-East commercial and housing remain more challenged.

In the meantime, contractors are shifting strategy: leaning into relationship-driven procurement, earlier cost advice and more agile bidding strategies, aiming to secure a presence on future opportunities while maintaining commercial discipline on the highest-risk projects. Supply-chain fragility remains a critical operational watchpoint. Payment delays, project slip and reduced sub-contractor liquidity are elevating delivery risk, which is highly present in boardroom thinking.

Overall, market stability feels brittle. There is no collapse in on site activity, but the willingness to commit new capital has thinned. The hope is that greater fiscal clarity and easing finance costs will unlock a more coherent upswing in 2026. Until then, the dominant posture remains pipeline protection over expansion, tight controls and continued selectivity.