UK construction firms face rising costs and price hikes

UK construction firms are facing significant financial pressure due to rising operational costs, with approximately 32 per cent of businesses expecting to increase prices in October. This represents the highest proportion of price hikes in the sector since February 2023.

Data from the Office for National Statistics (ONS) indicates that energy price volatility and rising fuel costs are major drivers of this trend. Some businesses have seen energy costs rise by as much as 25 per cent over the last six months. These pressures have contributed to a 0.5 per cent fall in UK construction output in the three months leading to July.

Industry experts warn that higher oil prices will lead to sustained inflation across the supply chain, affecting materials, haulage, and plant hire. There is particular concern for smaller subcontractors, who are already at a higher risk of insolvency and may lack the negotiating power to absorb these increasing costs.