According to a new report by Southern Construction Framework, tender workload has increased markedly over the last quarter, but conversion from tender to site start remains inconsistent
The survey of over 300 subcontractors across the southern UK found that tender workload increased by 2.6% since Q4 2025, reflecting an environment in which clients are continuing to test the market and progress schemes to the tender stage, despite ongoing macroeconomic uncertainty.
Across the trades, brickwork tender workload led the increase, rising by 10.9% on the previous quarter. This was followed by steelwork (6.1%) and roofing and cladding (4.2%).
Project selectivity is increasing across the construction sector
Contractors and sub‑contractors reported a notable increase in selectivity, with bidding strategies increasingly focused on projects that are fully funded, commercially viable and demonstrably capable of progressing without prolonged delays.
Janara Singh, assistant framework manager, Southern Construction Framework, explained: “Subcontractors told us there is often misalignment between design ambition and budget reality. This disconnect is driving repeated value-engineering exercises, redesign cycles, and extended pre‑construction periods.
“As a result, the volume of enquiries continues to grow, while the proportion of projects converting to site remains constrained, contributing to inefficiency and increased bid costs across the industry.”
Increasing build costs are driving inflation
Build costs have increased by 5.8% since Q4 2025, significantly outpacing the UK CPI headline inflation rate of approximately 3%.
This reinforces the persistence of construction‑specific inflation, driven primarily by material, labour and energy inputs rather than broader consumer price trends. The trades with the largest increases included: steelwork (+13.3%), groundworks (+6.3%), and concrete frames (+5.9%).
Supply chain partners reported that they anticipate steel prices will increase by £300 by Q3 2026, partly driven by anticipated steel import tariffs taking effect in July.
Recent policy proposals outlined in the King’s Speech highlight the strategic importance of domestic steel production. While potential nationalisation could improve security of supply and support long‑term investment, its impact on pricing and competitiveness remains uncertain, adding to short‑term volatility for contractors seeking cost certainty and reliable supply.
Predicted tender workload trends for 2027
Looking ahead to Q1 2027, build costs are anticipated to increase by 8.0%.
The trades with the greatest anticipated change in building costs are: steelwork (+11.2%), roofing & cladding (+10.0%), and brickwork (+9.0%).
The report also found that contractors are deliberately avoiding employment until start dates are secure, which in turn reinforces mobilisation delays. Employment levels are expected to grow by +5.0% by Q1 2027, reflecting cautious confidence as workloads increase.
However, the report predicts workforce resilience will remain uneven, with contractors managing labour growth carefully to avoid over‑exposure ahead of secured site starts.
Adrienne Turner, framework manager, concluded: “In a volatile market, projects are more likely to reach site when clients engage earlier with the supply chain, build flexibility into procurement routes and allow time to resolve affordability and design issues before formal tender. That upfront collaboration is vital to helping avoid project stalling.
“In relation to steel, which is a key factor behind rising costs throughout the sector, having early insight into future demand will help improve procurement planning and contribute to greater price stability.”
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