Introduction

How will UK construction handle a second wave of inflationary pressure?

The shockwaves of the war in Ukraine have reverberated around the world.

While the humanitarian crisis is being felt most keenly in the conflict zone, and in the European countries that have between them welcomed millions of Ukrainian refugees, the economic fallout has been global.

Fuel prices have soared, and Western sanctions on Russia have interrupted the complex global supply chains on which industry relies.

While the initial impact was felt in energy and commodity markets, the wider effects are now rippling through the construction supply chain too.

Having been buffeted by sharply rising input prices in 2021, the UK’s construction industry is now bracing itself for a second wave of inflation.

Price growth is likely to pick up significantly in the coming months and our central forecast suggests real estate tender price inflation could hit an annual rate of 8.5 percent for 2022.

This issue of the UK Market Intelligence report explores where the renewed inflationary pressure is likely to be felt most keenly, and what clients and their suppliers can do to mitigate both the inflation itself and its impact on investment decisions.

At a glance