2 December 2025
2026 Forecast: Where’s the UK Construction Market Heading?
After a challenging few years, the UK construction sector is showing signs of stabilisation, and importantly, forecasted growth for 2026 and beyond.
- According to PwC, the sector is expected to grow around 1% in 2025 before accelerating in 2026-27, largely driven by public investment and infrastructure.
- Construction Leadership Council / Experian forecast output growth of 3.4% in 2026 and 4.3% in 2027.
- However, upward pressure on building costs remains strong: BCIS set tender-price growth at 16% over the next five years.
What this means for developers & consultants:
- Infrastructure & industrial sectors are clear growth areas, as policy support, energy and logistics projects gather pace.
- Residential recovery is expected in 2026 as affordability improves and planning reforms take effect.
- Commercial offices and retail remain under pressure—developers should focus on adaptive reuse and flexible design.
- Managing inflation & cost risk remains vital: while the market is set to grow, margin pressure and input cost inflation remain key headwinds.
At BAQUS, we’re helping clients position their project pipelines for this next phase, by aligning with upticks in infrastructure, mitigating cost risks and adapting to a shifting demand landscape. Are you ready for 2026’s opportunities? Let’s talk strategy.