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Published: 26/01/2026
BCIS produces five-year construction industry forecasts, covering projected costs, tender prices and output, and examining the latest construction market trends.
The quarterly BCIS building briefing presents our view of housing, infrastructure, public non-housing, private industrial and private commercial new work output against the backdrop of materials and labour costs, and the wider economic background and market conditions.
The full briefings are available to subscribers of BCIS CapX, the leading service for construction costing activities.
BCIS construction industry forecast – 4Q2025 to 4Q2030
Building costs are forecast to increase by 15% over the next five years, while tender prices are expected to rise by 17% over the same period, according to BCIS’s latest construction forecast data.
New work output is expected to grow by 16% between 2025 and 2030.
Dr David Crosthwaite, chief economist at BCIS, said: ‘The industry ended 2025 facing familiar challenges. Demand remains weak and confidence subdued, and while the pace of decline may have eased slightly, there was little in the Autumn Budget to deliver an immediate uplift in workloads, particularly across housing and commercial construction.’
The BCIS All-in Tender Price Index, which measures the trend of contractors’ pricing levels in accepted tenders, i.e. the cost to client at commit to build, saw annual growth of 2.5% in 4Q2025.
On the input costs side, labour remains the primary driver of project costs. Skills shortages continue to prevail, with the TPI panel reporting that shortages are now more acute among white-collar roles. Insolvencies remain a feature of the market, though panellists noted these tend to result in a redistribution of expertise rather than a permanent loss of skills.
Dr Crosthwaite added: ‘Labour cost pressures remain a key concern for the industry. While there are early signs that wage growth is easing, skills shortages remain prevalent and could quickly re-emerge as a constraint if demand strengthens.’
Total new work output fell by 4.2% in 2024. BCIS expects subdued growth in new work output through 2025 as a whole, before growth picks up in 2026.
Dr Crosthwaite said: ‘We expect growth to strengthen from 2026 as delayed schemes progress and housing and infrastructure activity begin to recover. However, that recovery is likely to be uneven and will depend on improved confidence and clearer project pipelines.’
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Quarterly updates to forecasts are published for building, infrastructure, and maintenance, cleaning and energy, while an annual update is published for the economic significance of maintenance.
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