UK construction costs set to rise by 3.6% as uncertainty stalls development, says Currie & Brown

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.