Positive Midlands construction outlook as price forecasts remain steady – report

An acceleration of priority construction projects is expected in the Midlands as the latest Construction Market Intelligence (CMI) report from Rider Levett Bucknall (RLB) shows that the recent Autumn Statement has had minimal impact on tender price forecasts.

According to the independent built environment consultancy, despite the national picture for new work seeing only modest improvement in 2025, several funding announcements present opportunities for renewed momentum in the Midlands.

These include:

• £500m Mayoral Revolving Growth Fund for the North and Midlands 
• £820m Youth Guarantee scheme, supporting future skills pipelines
• A share of the £13bn integrated settlement funding for the West Midlands, aimed at boosting housing, employment, and regeneration

These allocations have the potential to accelerate key regional projects, including Birmingham’s proposed Sports Quarter, as well as unlocking further development across health, industrial, education and housing sectors.

Tom Caesar, an RLB associate based in its Birmingham office, said: “The Autumn Budget may not have delivered major surprises, but for the Midlands there are clear positives. The integrated settlement funding and additional contributions to the Local Growth Fund and Mayoral Revolving Growth Fund give Birmingham and the wider region a platform for renewed progress.

“RLB expects this to support an acceleration of priority schemes such as the new Sports Quarter, as well as strengthen the pipeline for social and affordable housing. Additional NHS capital allocations should also bring opportunities to invest in and modernise existing estates.

“The challenge now lies in the pace at which these funds are released. With the Budget finalised, developers at least have a clearer picture, even if it isn’t everything they hoped for. Market conditions remain tough, and careful delivery will be essential to maintain balanced risk and ensure schemes remain viable.”

RLB’s CMI shows only no movement in Midlands tender price inflation:

• Forecasts for 2025 have remained the same at 3 per cent
• Forecasts for 2026 have remained the same at 3.5 per cent

Across the UK, near-term market conditions remain challenging as rising input costs, including higher wage rates, continue to place pressure on contractors and outpace tender price movements.

RLB’s CMI shows only marginal movements in national tender price inflation:

• Forecasts for 2025 have seen a slight uplift from 3.03 per cent to 3.17 per cent
• Forecasts for 2026 have eased marginally from 3.41 per cent to 3.27 per cent