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The latest London Main Contractor Survey by consultant AECOM highlighted the issue with a growing number of contractors looking to establish in-house MEP divisions.<\/p>\n
The report stated: \u201cThese skilled trades are experiencing acute shortages. This is due in part to the rapid expansion of the data centre sector, which is absorbing a large share of the leading MEP subcontractors.<\/p>\n
\u201cThis has left other construction sectors with a much smaller pool of high-quality subcontractors, driving up prices due to competition increases for limited specialist resource.<\/p>\n
\u201cSuch is the extent of the problem, some of the contractors we spoke to are building built in-house MEP delivery teams to use on their own schemes.\u201d<\/p>\n
The report said the problem swill intensify if the general market picks-up but short-term confidence among contractors in the capital is low.<\/p>\n
Brian Smith, head of cost management and commercial, AECOM said: \u201cThis year\u2019s survey shows contractors are balancing the need to secure work with managing risk exposure.<\/p>\n
\u201cAs competition intensifies, some are prepared to take on greater risk, such as committing to long programme durations, to win work, while others are prioritising lower-risk opportunities with trusted partners.<\/p>\n
\u201cThe challenge for 2026 will be maintaining stability by strengthening the industry\u2019s resilience and labour capacity ahead of what is expected to be a dynamic 2027.\u201d<\/p>\n
Looking ahead, the survey respondents have a more confident outlook for the longer term. Tier 1 contractors report healthy order books for 2026, built up of a diverse mix of sectors, rather than a reliance on any single\u00a0market.<\/p>\n
Orders in London were above the long-term average in the final quarter of 2025, with growth across all sectors offsetting the year\u2019s overall decline in residential activity.<\/p>\n
Evidence points to the London construction market diversifying away from residential projects, shifting focus to commercial, refurbishment, public sector, life sciences, and infrastructure projects\u00a0instead.<\/p>\n<\/p><\/div>\n