Construction costs in the UK are will rise by 3.6% this year, consultancy Currie & Brown has forecast.
As detailed in a new report titled “Construction in 2026: Where Certainty Comes from Agility”, the expected increase in the UK is higher than the 2.4% forecast global average but is considered “moderate” when taking into account market extremes.
In most countries, construction costs are forecast to rise between 2% and 6%, which Currie & Brown has put down to steady demand across infrastructure, healthcare, technology and industrial sectors.
However, China is likely to experience no increase in costs, which has brought the global average down, while escalation could reach 10% to 12% in Japan due to labour shortages and material pressures.
The report also warned that uncertainty is holding the market back.
Nick Gray, chief operating officer, UK and Europe at Currie & Brown, said: “Cost increases in the UK remain moderate, but uncertainty is holding the market back. Many projects are only just viable, so development is moving carefully, often step by step.
“The autumn Budget did little to shift that trajectory. It fell short for construction, offering no new tax incentives, increasing pressure through wage and tax changes, and providing scant detail on housing or digital infrastructure investment.
“In this environment, agility is essential. The ability to adapt quickly helps teams respond sooner, make firmer decisions, and avoid delays before they become costly.”
The report highlighted a dwindling workforce, shifting trade tariffs, supply chain disruption, energy price volatility, climate events, conflict and policy change as market disruptors.
Currie & Brown has outlined several recommendations for organisations to reduce cost risk in uncertain conditions. These include:
- Set a realistic starting point early. Use current market data to test cost, programme and risk assumptions against real conditions and comparable projects
- Plan for a small number of outcomes. Look at a few credible scenarios, then decide what to lock in early and where to stay flexible
- Check labour and market capacity by location and phase. If skills or resources are tight, adjust scope, sequencing or procurement before plans are locked in
- Make key decisions sooner. Confirm phasing, requirements and long-lead items earlier to reduce exposure later
- Use technology to spot pressure earlier. Focus on tools that improve visibility, shorten decision cycles, and support faster, clearer choices
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