Construction Disrupted Episode 98 - Is change destroying construction? (14.01.26)

It's good to be back (Happy New Year everyone). 2026, the year construction builds more than just homes, it's the year for building positivity, one episode, three headlines, two opinions and one takeaway at a time. Let's get to it:

1. Market Forecast: Strong Order Books Drive Tender Inflation as Smaller Firms Struggle

The UK construction industry demonstrated resilience in 2025 despite economic uncertainty. While overall sentiment suggested a slowdown, data revealed that construction output grew faster than services or manufacturing. However, this growth came with challenges:

1. Tender Price Inflation: Tender prices increased by 3.0% in 2025, driven by persistent inflation and subdued demand that failed to yield cost savings.
2. Building Costs: Building costs rose by 3.5%, with significant price hikes in imported materials like wood, aluminium, and electric water heaters.
3. Smaller Firms Struggling: Smaller construction firms faced difficulties due to rising costs and economic pressures, highlighting the need for targeted support to ensure their survival.

In parallel, the Building Safety Regulator (BSR) reported a record year-end performance in processing Gateway 2 building control applications. Key highlights include:

1. A 250% increase in Gateway 2 determinations in the final quarter of 2025 compared to the first quarter.
2. A focus on resolving legacy cases, with 83% of older applications approved.
3. The establishment of an Innovation Unit to streamline approvals for new build applications, achieving results in just 12-13 weeks.

These developments indicate a positive trajectory for the industry, but challenges such as cost inflation and the struggles of smaller firms remain critical issues to address.

2. Fast Homes at Scale: ‘We’ve All the Tools We Need to Solve Homelessness’

The homelessness crisis in London has reached alarming levels, with over 130,000 households in temporary accommodation as of 2025. The cost of housing families in temporary solutions has skyrocketed to nearly £3 billion annually, surpassing the budget for building affordable homes.

Despite the challenges, innovative solutions exist to address this crisis:

1. Modular Construction: Companies like ZED PODS and RSHP have developed modular housing solutions that can be deployed quickly and efficiently. For example, ZED PODS installed 25 zero-carbon homes above a car park in Bromley, retaining most parking spaces below.
2. Prototype Modular Homes: RCKa and Rollalong have created high-quality modular homes that can be installed in under two hours. These homes are cost-effective, sustainable, and offer a design life of over 60 years.

To scale these solutions, the regulatory and policy environment must adapt. Expanding permitted development regulations and adopting progressive procurement practices are essential steps. With determination and creativity, the UK can leverage existing tools to address homelessness and build a robust manufacturing sector for permanent housing.

3. Workforce Challenges and Opportunities: Over 20% of Built Environment Workers Have Considered Changing Profession

The UK construction industry faces significant workforce challenges, with 21% of built environment workers considering leaving the profession due to the fast pace of change. Key concerns include:

1. Rising workloads and pressure, with 50% of employees expressing concern about increasing demands.
2. Fear of job difficulty, loss of control, and poor communication during times of change.

Despite these challenges, construction careers are among the fastest-growing jobs in the UK, according to LinkedIn’s Jobs on the Rise list for 2026. Notable roles include:

1. Building Inspectors: Ranked as the fastest-growing construction job, these professionals ensure compliance with regulations and standards.
2. Other Growing Roles: Heating and air conditioning engineers, preconstruction managers, land managers, energy analysts, and property directors are also in high demand.

The industry’s rapid evolution, driven by technological advancements like AI, is both a challenge and an opportunity. While AI is expected to deliver value, it has also contributed to change fatigue among workers. Addressing the skills shortage and improving communication during transitions are critical to retaining talent and ensuring the industry’s growth.

Bios

Ryan Jones - SLG Agency

For almost 20 years, Ryan’s focus has been on helping brands in the construction and manufacturing sectors tell their story.

His career began in PR, working for global businesses across a variety of sectors, before opting to focus on construction and the built environment.

In his role as Managing Director, Ryan works to ensure that SLG Agency continues to be one of the construction industry's leading specialist strategic and creative agencies, having seen its work recognised by the likes of Campaign, Marketing Week and The Drum in recent years.

Ryan is regularly asked to speak at trade shows and events, and to contribute thought leadership pieces to trade media. He is also a member of several industry advisory boards, including Constructing Excellence and the Greater Manchester Chamber of Commerce.

His passion for the construction sector has seen him work with clients on CSR campaigns that tackle the sector’s public perception, culminating in him recently launching a not-for-profit called Deconstruction.

Peter Sumpton - buildDifferent

Peter is a construction–marketing strategist and co-host of Construction Disrupted. With two decades’ experience spanning manufacturers, contractors and agencies, he helps organisations swap scattergun activity for clear strategy, joined-up planning and measurable outcomes.

His approach is practical and plain-spoken: cut the noise, focus on what moves the numbers, and build repeatable systems that teams can actually use.

Having seen first-hand how unfocused tactics waste time and budget, Peter works with leaders to align commercial goals, customer insight and content so marketing supports delivery rather than distracting from it.

Peter's passion lies in diagnosing organisations' marketing functions' capabilities and existing market, assembling what’s required to create a functional strategy, fit for purpose and scalable.

Marketing should create value, not just cost, and Peter’s work is about making that the norm.