Construction firms across the UK are still dealing with rising material costs in 2026, even though activity in some parts of the sector has slowed.
Government data shows that overall material prices continued to edge upward in the year to April 2026, with the All Work index increasing a little over 3 percent. The rise is smaller than the sharp jumps seen during the energy crisis, but it still adds pressure to projects already working with tight margins.
Some materials have moved more sharply than others. Fabricated structural steel and aggregates have recorded annual increases of around 8 percent in early 2026. Analysts point to a mix of influences behind these changes. Higher oil prices, supply constraints and increased transport costs remain part of the picture. Many suppliers are also facing higher labour costs, which feed into the final price of goods.
Even though a few materials have eased slightly from previous peaks, prices overall remain well above where they were before the pandemic. BCIS analysis notes that the All Work index for 2025 sat close to 40 percent higher than in 2019, showing how much the baseline has shifted. Monthly changes may look small on their own, but the cumulative effect is significant for contractors planning long-term work. Geopolitical tensions are also shaping the market.
The conflict in the Middle East has added volatility to fuel and shipping costs, which affects imported goods such as timber, plywood and certain steel products. While many materials are sourced domestically or from Europe, the industry is still tied to global energy markets. Prolonged instability could create further upward pressure later in the year.
Market conditions remain uneven across the sector. Government figures show a drop in deliveries of bricks and concrete blocks, reflecting weaker housebuilding activity and a cautious approach from developers. At the same time, repair and maintenance work has held up better, helping to balance overall output.
Most forecasts suggest that higher material prices are likely to persist through 2026. Surveys of construction professionals show strong expectations of further increases, with many preparing for continued cost pressure over the next 12 months. For now, firms are focusing on careful planning, clearer communication with clients and closer monitoring of supply chains to manage the challenges ahead.