Pipelines need to translate into work more quickly, T&T boss says as firm raises tender price index

The boss of Turner & Townsend’s UK cost management business has added her voice to those worried that planned pipelines of work are not being turned quickly enough into projects on the ground.

Stephanie Marshall, T&T’s managing director for UK real estate cost management, told Building a pipeline was “good for visibility and important from a context point of view but a project isn’t a project until it’s a project”.

In the wake of last week’s weak PMI data, commentators said there was a “growing disconnect” between what is being planned and what is happening on sites.

“Many businesses are still waiting for that work to translate into meaningful activity,” admitted Paul Atkinson, restructuring advisory partner at FRP while Joe Sullivan, partner at MHA, added: “A pipeline is not work on site.”

Marshall warned viability of schemes remained the biggest single issue but said she remained optimistic for 2027 with a slew of new projects expected to come on stream. “The level of enquiries is solid,” she added.

She said contractors were wanting to know more about risks involved with jobs before committing to contracts. “There’s a lot of dialogue about who holds the risk and that [talking about risk] is on the table much earlier.”

In its latest quarterly update, T&T said two-thirds of contractors surveyed are prioritising bolstering profit margins over growing revenue.

The report said that despite subdued national construction output, growing cost pressures are facing individual projects had led it to revise its tender price forecast upwards for the first time in two years.

It said building forecasts had risen from 3.5% to 3.75% this year and next while infrastructure tender pricing was expected to rise from 5% to 5.25% through 2026 and 2027.

T&T said softening activity in commercial and residential is being countered by buoyant investment in sectors such as major infrastructure and energy programmes and data centres, “limiting the relief which a quieter, more competitive market would normally bring to tender prices”.

It added: “These pressures are also being compounded by escalating material and commodity costs as a result of tariffs and geopolitical disruption, as well as stricter building regulations and more complex specifications.”

T&T said clients had to “more closely assess contractor capacity and appetite in the regions and sectors where they plan to build and engage early”.

Marshall added: “Clients need to understand the market on their doorstep, engage with suppliers early and present contractors with well-defined plans, clearly established objectives and balanced terms to secure their interest.”