Despite a promising budget announcement, the UK construction sector faces mounting challenges. Analysts warn of rising costs driven by higher employer National Insurance Contributions (NICs) and escalating building expenses.
From April 2025, increased NICs are expected to push construction costs up by 0.75%–1%, according to Arcadis’ Market View report. The study highlights stubborn inflation, regulatory complexities, and predicts full recovery will now be delayed until 2026.
Meanwhile, BCIS forecasts building costs will surge 17% over the next five years, with tender prices rising 19%.
Callum Thompson, CEO of Business Energy Claims commented:
“Labour’s focus on infrastructure will create jobs and innovation, but growth comes with higher costs. Construction firms must reassess finances to stay competitive.”