UK Construction Industry Outlook 2026
TL;DR
The UK construction industry is projected to grow at an annual average of 2.4% between 2024 and 2028, according to CITB's 2024 Construction Skills Network (CSN) report. To meet this demand, the sector needs an extra 251,500 workers by 2028 — roughly 50,300 every year. Output rebounded in 2024 with ONS data showing construction is one of the largest contributors to UK GDP, worth around £139 billion in 2023. Infrastructure, repair & maintenance and private housing remain the biggest drivers, while skills shortages, an ageing workforce and net zero commitments will define 2026.
Table of Contents
1. The Size of the UK Construction Sector
Construction is one of the UK's largest industries. Office for National Statistics (ONS) figures show construction output was worth around £139 billion in 2023, contributing roughly 6% of UK gross value added. The sector employs more than 2.1 million people across England, Scotland, Wales and Northern Ireland, according to ONS Labour Force Survey data.
Self-employment is unusually high in construction. ONS data consistently shows that around 35–40% of the construction workforce is self-employed, compared with roughly 13% across the wider UK economy. That makes contractors, sole traders and small limited companies the backbone of how work actually gets done on UK sites.
The industry is also fragmented. Companies House and Build UK data show that the vast majority of construction firms employ fewer than 10 people. SMEs deliver most repair, maintenance and improvement work, while a much smaller number of Tier 1 contractors lead major infrastructure programmes such as HS2 and the Lower Thames Crossing.
Understanding this shape matters: when commentators talk about "the construction industry", most of the workforce is actually a network of small firms and self-employed tradespeople — exactly the audience this content hub is built for.
2. Growth Forecast for 2026
The Construction Industry Training Board's 2024–2028 Construction Skills Network (CSN) forecast projects average annual output growth of 2.4% across the UK. After a difficult 2023, when ONS recorded a contraction in new housing output, growth is expected to broaden through 2025 and 2026 as interest rates ease and infrastructure pipelines accelerate.
Within that headline, infrastructure is forecast to grow fastest, with CITB CSN highlighting energy, water and transport as the strongest sub-sectors. Repair and maintenance — which already accounts for around a third of total construction output, according to ONS — is also expected to grow steadily as the UK's ageing housing stock requires upgrades.
Private housing is more cyclical. ONS new orders data showed sharp falls in 2023 followed by a tentative recovery into 2024. CITB expects private housing to return to growth by 2026, but the pace will depend on mortgage rates, planning reform and the new Future Homes Standard, which is due to apply to homes in England from 2025.
For tradespeople, the practical message is that 2026 is set to be busier than 2024, with a wider mix of work available — particularly in retrofit, infrastructure and large repair and maintenance programmes.
3. Workforce Demand & the Skills Gap
CITB's 2024 CSN report estimates that the UK construction industry needs an extra 251,500 workers by 2028 to meet expected demand — equivalent to about 50,300 additional workers per year. That is on top of replacing those leaving the industry through retirement.
The workforce is ageing. ONS Labour Force Survey data shows roughly 1 in 5 construction workers is aged 55 or over, meaning a significant share of skilled tradespeople will retire over the next decade. CITB has repeatedly warned that without stronger recruitment and training, the gap between demand and supply will widen.
Trades in highest demand include carpenters and joiners, electricians, plumbers, bricklayers and groundworkers, according to CITB's CSN occupational forecasts. These same trades dominate the UK Government's Shortage Occupation List in construction.
For contractors already in the industry, the skills shortage is largely good news: it supports day rates, reduces competition for work and increases bargaining power on payment terms — provided you can demonstrate the right qualifications and CSCS card.
4. Where the Work Will Be
The Government's National Infrastructure and Construction Pipeline, published by the Infrastructure and Projects Authority, sets out hundreds of billions of pounds of planned investment across roads, rail, energy and water through the next decade. Major programmes such as Sizewell C, Hinkley Point C and the offshore wind buildout will continue to drive demand for civil engineering, M&E and groundworks trades.
Housing remains a political priority. The Department for Levelling Up, Housing and Communities (now the Ministry of Housing, Communities and Local Government) has a long-stated ambition of delivering 300,000 net new homes a year in England. ONS housebuilding data shows actual completions have consistently fallen short, which means a sustained pipeline of work for housebuilders and their supply chains.
Retrofit is the fastest emerging segment. The Department for Energy Security and Net Zero's Heat and Buildings Strategy commits the UK to phasing out new fossil fuel boilers and dramatically scaling up heat pump installations. That creates significant demand for heating engineers, electricians, insulation installers and MCS-certified contractors.
Regional differences matter. CITB CSN forecasts the strongest growth in the East of England, the South West and parts of the Midlands, driven by infrastructure and housing. Tradespeople willing to travel — or list multiple postcodes on platforms like Tradesman Network — are likely to see the widest job choice.
5. Headwinds: Insolvencies and Costs
It isn't all positive. Insolvency Service statistics show construction has consistently had the highest number of company insolvencies of any sector in England and Wales, with more than 4,000 construction firms entering insolvency procedures in 2023 alone. Late payments, fixed-price contracts and material price volatility are key drivers.
Material costs remain higher than pre-pandemic levels. The Department for Business and Trade's monthly Construction Material Price Index showed that, even after easing in 2024, prices for many key materials sit well above 2019 levels. That squeezes margins on jobs priced months in advance.
Late payment is endemic. Build UK's payment performance reporting consistently shows that even Tier 1 contractors take, on average, 30+ days to pay invoices. That is one reason why every contractor on this platform should know their rights under the Housing Grants, Construction and Regeneration Act 1996 — covered in our Late Payments guide.
Finally, regulatory change is accelerating. The Building Safety Act 2022 has introduced stricter duties on those working on Higher-Risk Buildings, while the Future Homes Standard will tighten energy requirements from 2025. Staying compliant — and certified — will be a competitive advantage in 2026.
6. What It Means for Tradespeople
For self-employed contractors and small firms, the 2026 outlook is one of strong demand, real skills bargaining power and significant change in the type of work on offer. Trades that can demonstrate up-to-date skills cards, retrofit competence and clean compliance records will be best placed.
The biggest single risk to your business in 2026 is unlikely to be lack of work — it is much more likely to be cash flow. Build UK and FMB data both point to late payment and insolvency as bigger threats than empty diaries. Strong contracts, clear payment terms and proactive credit control matter more than ever.
Now is the right time to invest in training. CITB grants of up to several hundred pounds per course are available to CITB-registered employers, and many short courses for retrofit, heat pumps and Building Safety Act competence are co-funded. Our CSCS Cards and Apprenticeships guides cover the routes in detail.
In short: 2026 should be a good year for skilled tradespeople in the UK — but only for those who treat their trade as a business, keep their certifications current and stay alert to who they are working for.