Southern Construction Framework\u2019s latest market report for the first quarter of the year warns that pricing and supply conditions are now shifting week by week rather than month by month.<\/p>\n
The report, based on a survey of over 150 subcontractors, said tender workload rose by 2.6% during the first quarter as clients continued to test the market and bring schemes forward.<\/p>\n
But conversion from tender to site remains patchy as cost pressure, funding gaps and supply chain caution hold projects back.<\/p>\n
Build costs jumped 5.8% in the first quarter, outstripping headline UK CPI inflation of around 3%.<\/p>\n
Trades with the largest increase included: Steelwork (+13.3%), Groundworks (+6.3%), Concrete Frames: (+5.9%).<\/p>\n
Supply chain partners reported they are anticipating steel prices to increase by \u00a3300 by Q3 2026, partly\u00a0driven by anticipated steel import tariffs from July.<\/p>\n
Steelwork saw the sharpest increase, rising 13.3%, followed by groundworks at 6.3% and concrete frames at 5.9%.<\/p>\n
The report said the Q1 market had entered \u201ca period of renewed volatility\u201d driven by geopolitical instability, disruption to global energy markets, trade routes and investor confidence.<\/p>\n
It warned that material availability now needs much closer monitoring alongside prices, as energy costs, supply chain disruption and trade measures continue to feed through to key products.<\/p>\n
Residential schemes are under particular pressure, with viability concerns still blocking projects from moving from tender to site.<\/p>\n Janara Singh, assistant framework manager at SCF, said: \u201cSubcontractors told us there is often misalignment between design ambition and budget reality.<\/p>\n \u201cThis disconnect is driving repeated value engineering exercises, redesign cycles and extended pre-construction periods.<\/p>\n \u201cAs a result, the volume of enquiries continues to grow, while the proportion of projects converting to site remains constrained, contributing to inefficiency and increased bid costs across the industry.\u201d<\/p>\n Firms warned the near-term outlook remains active and fragile, with continued uncertainty around pricing, capacity and delivery.<\/p>\n Build costs are now expected to rise by a further 8% by Q1 2027.<\/p>\n The sharpest forecast rises are steelwork at 11.2%, roofing and cladding at 10% and brickwork at 9%.<\/p>\n Employment levels are also forecast to rise by 5% by Q1 2027 as workloads increase.<\/p>\n But SCF said contractors are deliberately avoiding recruitment until start dates are secure, reinforcing mobilisation delays when schemes do finally move ahead.<\/p>\n<\/p><\/div>\n![\"-\"](\"https:\/\/www.constructionenquirer.com\/wp-content\/uploads\/Screenshot-2026-05-21-at-07.45.49.png\")
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