A renewed drive from UK government offers the chance to reassert the construction industry’s role in national prosperity and modernise the sector. But success relies on overcoming a weakened supply chain and on building capacity and skills for the long term.

Construction in the UK has struggled against a stop-start policy environment since a general election was called in May 2024. Early commitments from the new government signalled an ambition to get Britain building, to reform the planning process and create world-class capabilities in growth-driving sectors from manufacturing and life sciences to the creative arts.

The delivery of these welcome ambitions was largely put on hold as industry anxiously awaited the outcome of the government’s Spending Review and the publication of the Industrial Strategy. Though uncertainty remains around the direction of international trade agreements and the wider geopolitical landscape, the UK has renewed clarity on domestic policy and government’s areas of priority.

Overall inflation has eased and while the Bank of England has been cautious in cutting interest rate until it’s confident that inflationary pressures have abated, the trajectory is edging downwards. Construction cost inflation has likewise softened from the highs seen a couple of years ago – in Manchester, for example, construction cost inflation has fallen from 10.0 percent in 2022 to 3.5 percent in 2024.

The challenge now is to get the wheels of growth turning at pace. The effort to drive growth is falling in large part on the construction sector, but years of high interest rates, low margins and increased insolvencies have taken their toll on the industry. From digitising delivery approaches to bridging the skills gap, there’s work to do to get construction match-fit for delivery.