UK Construction Industry Trends: 2024 Report 

The global construction industry is the largest sector in the world, accounting for 13% of the planet’s GDP.  

Unfortunately, the industry as a whole has suffered from poor relative performance and low profitability. 

Meanwhile, the UK construction market PMI rose to 50.2 in March of 2024 – the highest since August 2023. 

Driven by dynamic technological advancements and high demand for cloud computing solutions, the global data centre construction market is forecasted to grow at a CAGR of 8.2% from 2024–2034. 

Also accelerating is the modular construction market, projected to grow at a CAGR of 6.2% from 2024–2029, reaching a 2029 market value of £109.62bn. 

However, not all experts are as hopeful as the rest. 

The American Institute of Architects (AIA) believes the construction market will weaken across 2024 and 2025, citing an expected slowdown of construction, rising long-term interest costs, and higher construction input costs as the triggers. 

Many experts believe that an industry overhaul is already in motion, as a changing market environment and disruptive technologies begin to supplement slow market growth.  

The UK construction market is forecasted to reach over £475bn by 2027. 

Numerous technological, socio-economical, and political factors present opportunities for transformation alongside environmental concerns and ever-changing consumer demands. 

For modern construction businesses, keeping a finger on the pulse of UK construction trends in 2024 is paramount to remaining competitive in the market. 

1. Rising building costs 

According to the latest BCIS Building Construction Industry Forecast, building costs are expected to rise by 15% over the next five years.  

Tender prices are also expected to increase by 19%. 

Overall building output is expected to drop by 5.5% in 2024 compared with 2023, largely due to decreased output in private commercial, housing, and industrial sectors. 

However, sector growth is expected to return in 2025. 

Dr David Crosthwaite, Chief Economist at BCIS, says: 

“As long as the cost of borrowing remains elevated, construction output is likely to suffer continuing declines. The BCIS TPI panel has reported that contractors remain risk-averse and selective about the projects they bid on. We expect annual growth in tender prices to continue to fall, but for them to be rising faster than costs by this time next year.” 

2. Construction material price rises slowing 

Construction materials for all work prices fell by 0.9% from June 2023 to June 2024 in the UK. Other New Work (as categorised by the Department for Business and Trade) dropped by 2.3%.  

However, New Housing prices and Repair and Maintenance prices increased by 0.7%. 

This data reflects a continued slowing of materials cost inflation compared to previous years, despite some outliers for different trades and material types. 

The biggest annual drops were fabricated structural steel, grave, sand, clays, and kaolin – reaching a reduction of 16.2%. 

On the other side of the spectrum, flexible pipes and fittings, and metal doors and windows grew by 17.4% and 16.1% respectively. 

3. Construction skills shortage grows more urgent 

A national skills shortage continues to put pressure on the industry, leading to a call-to-action to attract more young people to apprenticeships   

A trade skills report issued in 2023 revealed that at least 937,000 new workers would be required within the UK construction sector to meet growing demand by 2032.  

Speaking on this growing concern, Adrian Attwood, Executive Director, DBR (London) Ltd, commented:   

“Investing in skills needs to become a priority for the UK construction sector, particularly in specialist professions. Niche roles from conservation stonemasons and master joiners to leadworkers, gilders, and even cleaners are at significant risk as talent pools continue to shrink.  

“With the economy starting to stabilise and an upcoming election providing an opportunity to press the reset button on the education system, I hope that policymakers and the industry can come together to develop a deliverable strategy to overcome the acute human resource shortages we’re currently experiencing.”  

Builders, plumbers and electricians are in high demand, with over 65,000 open vacancies on popular UK job sites.   

An ageing workforce, the cost-of-living crisis, and the lingering effects of Brexit are having an impact on the uptake of new workers to the industry.  

4. Sustainable construction in the UK shows no signs of slowing down 

An environmentally conscious society is likely the driving force behind the UK’s growing demand for more sustainable construction practices. 

The UK green building market was valued at £4.6bn in 2023 and is expected to keep growing, with a predicted CAGR of over 9% for the period of 2023–2028. 

This market growth will be driven by increasing governmental initiatives to decarbonise buildings, alongside the growing environmental awareness that now exists on a global scale. 

Construction firms will benefit from a forward-thinking sustainable strategy that connects technology and carbon-friendly material use with smarter project planning. 

5. Low consumer confidence in new-build homes 

A shortage of existing homes plagues the markets, leaving homeowners reluctant to sell. Correspondingly, the new home construction industry is expected to grow in 2024.  

Add to that the rising costs of existing homes, and it’s clear a shift in consumer demand is well underway. 

The flip side of this shift in market direction is that many homebuyers still doubt the quality of new builds. 

A CIOB report launched in December 2023 revealed that 55% of UK adults surveyed believe older properties are usually higher-quality builds than new build homes. 

The report found a perceived lack of quality in new-build houses: 48% believe new builds are overpriced, while a further 41% say the homes are “lacking character”. 

CIOB claims the results of these trends have less to do with the overall quality of new-build housing, but rather come from a lack of understanding from consumers regarding their options to ensure construction meets expectations. The CIOB commented: 

“It is paramount that consumers understand that they do have access to a variety of avenues to help identify any issues and get them fixed through their housebuilder, primarily through commissioning a snagging survey.” 

6. UK regulatory compliance falls on professional development and engagement letters 

Two of the biggest factors in disciplinary decisions involving construction professionals are thorough engagement letters and comprehensive professional development. 

The Architect’s Registration Board identified engagement letters as the most common topic of complaints – responsible for 50% of cases involving a breach of Standard 4.4 of the Architect’s Code.  

Construction companies should have a policy in place to send out terms of engagement on every new construction and ensure terms comply with Standard 4.4 requirements. 

Equally important is the new CPD (continuing professional development) scheme expected to become mandatory in January 2025. 

UK law firm, RPC, explains that five surveyors were sanctioned since 2023 for failing to complete the required CPD hours, and three of the five were “expelled as a result”. 

7. Insolvencies high for UK construction firms 

According to the Insolvency Service, construction firms accounted for 17.7% of all insolvencies in England and Wales in May of 2024. This marks a 1.9% year-on-year increase, and a 33.2% increase compared with May of 2019.  

Firms categorised as “providing specialised construction activities” are consistently the most affected. These include subcontractors, demolition and site preparation teams, and installation services. 

Building Cost Information Service (BCIS) believes a multitude of factors feed into insolvency: 

“This is in part due to the nature of contract cycles and the challenges of cash flow management that contractors and subcontractors are subject to.” 

Keys to avoiding insolvency include implementing modern technologies, such as construction management software, and aligning company values with today’s consumer expectations. 

Read more about construction insolvencies in the UK: 

Construction Insolvencies – Where Does the Sector Go from Here?  

8. Prefabricated construction is gathering steam 

Modular and prefabricated construction methods continue to grow in popularity as consumers aggressively push for faster turnarounds. 

According to an industry forecast report by Inkwood Research, the global prefabricated construction market is expected to reach £210bn by 2032 – achieving a compound annual growth rate (CAGR) of 8.7% during the forecast period of 2023–2032. 

Off-site manufacturing techniques such as modular and prefabricated construction can help companies improve cost-effectiveness while reducing construction time to deliver faster turnarounds for customers. 

9. Construction projects blighted by rework 

Industry experts estimate up to 30% of construction costs are related to rework, according to software company Construct Connect. 

Construction defects represent poor productivity and waste on projects. When reworks are required, parts of the project must be disassembled and rebuilt – resulting in unnecessary time and money spent fixing something that should’ve been done right the first time. 

Construction firms should look to employ virtual design and construction software that facilitates better collaboration and communication across teams to prevent defects from occurring. 

Read more about how to reduce rework in construction. 

10. Focus on deconstruction and reuse  

A shift towards deconstruction over demolition in 2024 may be key in reducing the alarming rates of waste within the UK construction industry  

The built environment currently accounts for around 60% of the UK’s material consumption and nearly half of all waste.  

At the same time, new principles around promoting a circular economy are flooding into the construction industry, with the hopes of helping both the planet and businesses’ bottom line.  

In 2024, construction technology trends seem poised to shift towards ‘deconstruction’ projects rather than the more traditional demolition methods.  

The process of deconstruction allows for buildings to be incrementally taken apart, salvaging products and materials which can then be reapplied in future construction works. 

This becomes even more important as the industry’s trend towards using composite bonded materials to increase thermal performance often results in recycling rates being impacted as the materials can’t be separated.  

Read more about deconstruction in construction projects –  

What is ‘Deconstruction’ In Construction?  

How To Reduce Waste In Construction 

11. Construction management software 

According to Allied Market Research, the construction management software industry is expected to grow at a CAGR of 10.2%, reaching £18.69bn by 2031. 

This steady predicted growth rate reflects an accelerating need for improved productivity and efficiency in construction firms, as businesses pursue new ways to optimise processes, centralise information, and control costs. 

Robust cloud-based tools like Access Coins ERP software enable construction managers and their teams to improve profit margins and avoid insolvency by providing total visibility and greater collaboration across complex projects. 

By automating critical workflows, connecting the field to the office, and optimising project cost control, Access Coins construction management software offers a powerful solution to many of the industry challenges businesses face in 2024. 

To learn more about how Access Coins can help you lift productivity and manage risk across project life cycles, check out our suite of tailored construction solutions. 

12. Drone usage in the construction industry 

One unique approach to raising construction efficiency is the use of drone technology. 

While many may still consider drones a novelty, their use in the construction industry is well-documented. 

In the US alone, drone usage has led to a 61% increase in measurement accuracy when applied to stockpile management.  

Drone-equipped companies and developers have also reported a 53% time reduction for gaining data insights and a 65% improvement in overall communication. 

13. Construction robots help builders achieve more, faster 

Expected to grow at a CAGR of 15.3% from 2022–2031, the construction robots market is transforming how projects are handled and resolving many of the common pain points faced by the industry in 2024. 

Robotic technologies do more than trim construction time on site; they’re also helpful for improving worker safety and supporting sustainability efforts. 

While the benefits of automation offer much-needed assistance in improving the bottom line for construction firms, they also present a new challenge: namely, upskilling workers to ensure construction robotics are used effectively and correctly. 

Construction firms looking to automate more processes with robotics should take the time to train and educate staff on proper usage while ensuring investments in robotics do not compromise cash flow. 

14. Smart cities are reshaping design and development strategies 

Smart cities are urban areas that use information and communication technology to operate more efficiently and improve the quality of life for citizens. 

The commercial construction sector is an early embracer; smart cities rely heavily on a modernised approach to housing and infrastructure. 

Technologies driving this trend include: 

• BIM software 
• Generative AI 
• 3D printing 
• LiDAR 
• The Internet of Things 

Dr Hassan Albalawi, CEO and Co-founder of WakeCap, an IoT workforce safety solution, says: 

“There are new technologies, such as the IoT (Internet of Things), that are enabling the creation of smart construction sites; with optimised efficiency, improved working conditions, and enhanced health and safety outcomes.” 

The push for smart cities is one of necessity: one report suggests that 28% of the global population will live in a city with at least 1 million inhabitants by 2030. 

15. Decarbonisation of non-domestic buildings is a new catalyst for change 

In line with trends across all sectors of the construction industry, a greener alternative to commercial buildings is an approach all firms should start to consider. 

The 2023 Future Homes and Buildings Standard, set out by the UK government, requires developers in England to deliver a 10% Biodiversity Net Gain for new housing, industrial, and commercial developments. 

Under the new framework, sustainable materials and heat pumps are considered key to reducing emissions in non-residential buildings. 

For commercial construction companies, staying abreast of governmental regulations while striving to continuously reduce carbon emissions through greener practices and technology should be top of mind in 2024. 

16. Collaboration driving construction procurement risk management 

Procurement in construction is an ongoing battle. 

When presented with a list of 24 materials and asked to specify which items they experienced shortages with, more than 70% of builders surveyed marked at least half of the materials listed. 

To deal with supply chain uncertainty, businesses are beginning to team up with competitors to build better resilience in times of disruption. 

In response to industry-wide supply chain instability, collaborative work in construction procurement has increased in 2024. 

According to RLB’s annual Procurement Trends Report, 54% of contractors reported a rise in procurement collaboration. 35% of those surveyed saw an increased willingness from clients to consider risk sharing. 

RLB Head of Industry and Service Insight, Paul Beeston, says: 

“There are mutual benefits for clients and contractors by moving to a programme-based, not project-based, procurement process where earlier contract involvement is standard and the risk is borne across parties, rather than resting solely on the shoulders of the contractor or the client.” 

Though some firms may baulk at working with other companies in their sector, collaboration can lead to cost savings and improved confidence in supply. 

Read more about the benefits of collaboration in construction, and how to achieve it. 

17. Advancements in safety equipment essential for risk management 

The construction industry suffers from a high risk of workplace injuries mostly due to the nature of the work and the tools being used.  

The US Occupational Safety and Health Administration estimates that almost 25% of work-related fatalities occur in the construction industry. 

65% of construction deaths are linked to what is known as ‘Focus Four’ hazards: Fall to lower level, Struck-by, Caught-in/between, and Electrocution. 

Risk reduction falls largely on the growing demand for better quality, more advanced safety equipment. 

Following on from 2024’s construction industry trends, we can make a few predictions about how the future of construction will shape up. 

Here are some 2025 construction trends you can expect to see: 

1. Sustainability will become a core value for many construction firms as consumer demand and governmental regulations force more decarbonisation and green building practices. 
2. Technologies like construction software, generative AI, and robotics will continue to gain popularity to establish faster job times and trim construction project costs. 
3. Workplace safety and employee upskilling will lead the way as incentives to counteract the industry-wide talent shortages. 
4. Collaboration between construction firms will increase as companies seek to build stronger supply chain resilience in light of recent disruptions. 

In summary, the future is bright for the construction industry, but optimism should be tempered by the fact that, for the market to thrive, a collective push towards more modern strategies – and a leaving behind of traditional approaches – must come first.