The UK construction industry has weathered an exceptionally challenging 2024, from rising costs and labour shortages to ongoing uncertainty around economic policy. Yet, as we look ahead, there are reasons for cautious optimism. Lower borrowing costs and a renewed focus on building more homes bring fresh opportunities for the sector Here, we explore the major trends reshaping the industry and what they could mean for you.
Skills Shortages are Driving up Costs
A persistent shortage of skilled workers continues to push wages higher, especially for specialist roles such as insulation installers and renewable energy engineers, where costs in London alone have surged by 22% in the past year.
The Building Cost Information Service forecasts tender prices to rise faster than building costs over the next five years, by 20% and 15% respectively. For many contractors, this could mean tighter margins and greater project risk.
The industry needs 937,000 new recruits over the next decade to keep pace, but less than a quarter of UK construction professionals are under 25, highlighting the urgent need to attract young talent. Recent figures show construction wages rose sharply in Q1-Q2 2024, with increases of +14.9% for unskilled and semi-skilled workers, and +5.6% for mechanical and electrical trades.
Reviewing risk management plans, considering price escalation clauses and ensuring adequate insurance cover can help keep projects viable and protect your bottom line.
Small Tool Theft: An Escalating Threat
Theft of tools costs the UK construction sector an estimated £98 million each year, with over 44,500 tools stolen in 2023, equivalent to roughly one every 12 minutes.
Most thefts now occur from vehicles, which increased by 14% last year to account for 55% of incidents, often overnight, when parked outside homes or in car parks. Seasonal trends show theft from vans is 53% higher in October after the clocks go back.
Beyond the cost of replacing tools, 83% of contractors say theft has directly led to lost work, averaging £1,836 each. Investing in robust storage, tracking technology and tailored insurance can help mitigate these risks.
Investing in Smarter Security
Faced with rising theft, 94% of tradespeople now take extra precautions, spending an average of £626 on measures like GPS tracking, alarms and reinforced locks.
Modern tools often include features such as remote disabling and QR code registration to help track items and deter theft. The impact of these measures is clear: the National Construction and Agricultural Theft Team reported recovering stolen equipment worth £6.2 million last year, nearly tripling the figure from the previous year.
Digital Transformation and BIM
Building Information Modelling (BIM) is now used in over 73% of UK construction projects, up from 62% in 2017. It helps reduce errors, improve collaboration and cut project costs, benefits especially clear when paired with modular construction.
While 97% of construction professionals globally expect digital investment to rise by 2026, 26% of UK workers say high implementation costs are the biggest barrier.
The greater adoption of BIM and other digital tools can improve efficiency, enhance safety, and support compliance with evolving standards, helping firms stay competitive in a rapidly changing market.
Modern Methods of Construction (MMC)
The UK modular construction market is now valued at £14 billion, growing at 6.3% annually. Modular and prefabricated methods can cut build times by 20%–50% by reducing weather-related delays and improving consistency.
The government’s Affordable Housing Bill requires MMC for 40% of residential projects on state land and at least 20% of new council homes, essential to meet the goal of building 1.5 million new homes by the end of this parliament.
Notable public sector examples include:
- A £2.9m alternative provision school in Barrow built with 29 modules.
- A new modular hospital wing at Royal Bournemouth Hospital adding 110 beds, due for completion in 2025.
- Greenshaw High School in Sutton, with 186 modules covering the area of 26 tennis courts.
Looking Ahead with Confidence
While challenges remain, including rising national insurance costs and ongoing skilled labour shortages, there are reasons for optimism. The Construction Product Association forecasts UK construction output to grow by 2.5% in 2025 and another 3.8% in 2026.
By proactively investing in technology, modern methods and risk management, UK construction firms can turn uncertainty into opportunity and continue to build a resilient, sustainable future.
At Thomas Carroll, we’re here to help you navigate this changing landscape. Whether you’re reviewing insurance cover, planning future projects or exploring digital transformation, our team is ready to help protect what matters most to your business.
For personalised advice, contact us on 02920 853788 or at contact@thomas-carroll.co.uk to learn more.
