INDUSTRY UPDATE NEWS
Labour costs driving tender price inflation
R ising labour costs, not materials, are now the main driver of inflation in construction project tendering, according to Turner & Townsend’s latest UK Construction Market Intelligence report. The consultancy forecasts that tender price inflation (TPI) will remain high despite falling materials prices. Real estate TPI is expected to stay around 3.5% from 2026 to 2029, with infrastructure inflation at 5%. Employment in the sector has dropped by 3.4% year on year, with the industry’s
While material prices have eased – structural steel is down 3.1% and sawn wood by 2.4% – labour-related inflation is outpacing these reductions. The report warns that US tariffs could reverse recent gains. Turner & Townsend recommends focusing on workforce retention through improved career progression, psychological safety, and inclusive workplace practices. “This is not just about money – it’s about how we treat people,” the report states.
average worker’s age now over 50 – pointing to a potential retirement cliff. “Half a decade on from the disruption of the Covid-19 pandemic, year-on-year employment is still shrinking,” said Martin Sudweeks, UK Managing Director of Cost Management at Turner & Townsend. He added: “We need to radically rethink how we attract talent – looking to a wider set of disciplines, backgrounds and skills that will deliver the modern, digitally- enabled, creative construction workforce of the future.”
Big construction pushes for reform
T hirteen major the government’s Planning & Infrastructure Bill, describing it as a “once-in-a-generation opportunity” to streamline development and stimulate economic growth. construction firms have written to MPs urging support for
called for “leadership and action” to deliver affordable, modern infrastructure swiftly. More than half of the signatories are subsidiaries of overseas firms. New to the group this year are Kier, Skanska and Jacobs, while Galliford Try and Morgan Sindall have dropped out.
letter states. “Communities, businesses and economic growth are being held back by a planning system that is too slow, uncertain and costly.” Although the bill is expected to pass with the government’s large majority, industry leaders want to ensure that its ambition is preserved. They
The letter, signed by Tier 1 contractors and consultants – including Kier, Skanska and Jacobs – coincided with the bill’s second reading in parliament. “The choices made now will determine whether the country seizes this moment— or lets it slip away,” the
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