New report finds increase in tender workload, but projects are failing to reach site

The latest industry report by the Southern Construction Framework (SCF), issued on 19 May 2026, identifies a complex landscape for the UK construction sector, characterised by a 2.6% increase in tender workload since the fourth quarter of 2025 alongside a persistent failure of projects to reach the construction phase.

While clients are actively testing the market, particularly in trades such as brickwork, which saw a 10.9% increase in tender enquiries, and steelwork, which rose by 6.1%, the conversion from procurement to site start remains inconsistent. This trend is driven by a significant disconnect between design ambitions and budget realities, forcing firms into protracted value engineering exercises and extended pre-construction periods. For main contractors and subcontractors, this environment necessitates a highly selective bidding strategy that prioritises projects with secured funding and clear commercial viability to mitigate the risks of escalating bid costs and operational delays.

Strategic challenges are further intensified by construction-specific inflation, which rose 5.8% over the last quarter, nearly doubling the national headline CPI of 3%. Steelwork has emerged as a primary cost driver, with prices increasing by 13.3%, while groundworks and concrete frames saw rises of 6.3% and 5.9% respectively. Supply chain partners are forecasting an additional £300 per tonne increase in steel prices by the third quarter of 2026, largely due to impending import tariffs and policy uncertainty regarding domestic production. Consequently, industry stakeholders anticipate a total build cost increase of 8.0% by early 2027. In response, contractors are exercising caution in recruitment, with employment levels expected to grow by only 5.0% by the first quarter of 2027 as firms delay hiring until project start dates are formally secured.

For companies seeking to navigate this volatility, the SCF report highlights significant opportunities within collaborative procurement frameworks. Business success in the current climate depends on early supply chain engagement, which allows contractors and clients to resolve affordability and design issues before reaching the formal tender stage. This upfront collaboration is essential to preventing project stagnation and provides a mechanism for better price stability in volatile materials markets. Contractors who can offer clients early insights into demand and implement flexible procurement routes will be best positioned to capture the growing volume of market enquiries. As the industry moves toward 2027, the focus for growth must shift toward integrated site-start strategies and proactive risk management to ensure that high tender workloads translate into secured revenue and sustainable site activity.