Market forecast: Why viability is tight for construction projects in the UK

By Pablo Cristi Worm 2025-04-09T06:00:00

Global uncertainty, combined with domestic regulatory change, a fragile demand outlook and expectations around inflation are combining to create tricky conditions. It’s a finely balanced equation with many moving parts. Pablo Cristi Worm of Aecom reports

01 / Summary

Tender price index ▲

Tender price inflation accelerated to 3.2% on the year in Q1 2025, up from 2.5% in Q4 2024 in anticipation of higher direct labour cost from April.

Building cost index ▲

Aecom’s building cost index increased to 3.3% on the year in Q1 2025, an uplift compared with the 1.8% quarter-on-year change recorded in Q1 2024, due to stronger industry wage growth.

Consumer prices index ▲

Headline consumer price inflation accelerated to 3.0% in January, up from an annual rate of 2.5% in December 2024. Services inflation increased from 4.4% annually in December to 5.0% in January.

This is PREMIUM content, available to subscribers only

You are not currently logged in. Subscribers may LOGIN here.

SUBSCRIBE to access this story

SUBSCRIBE for UNLIMITED access to news and premium content

A subscription will provide access to the latest industry news, expert analysis & comment from industry leaders, data and research - including our popular annual league tables. You will receive:

Print/digital issues delivered to your door/inbox
Unlimited access to building.co.uk including our archive
Print/digital supplements
Newsletters - unlimited access to the stories behind the headlines

Subscribe now

Get access to premium content subscribe today