UK construction output in mission-critical sectors is rising despite challenges such as access to power, tariffs and supply chains, according to Linesight’s latest Construction Markets Insights report.
The report found construction output is expected to return to growth in 2025, driven by demand in infrastructure and mission-critical sectors.
Cost inflation in the UK is tracking slightly ahead of the rest of Europe, with a range of 2.5% to 3.5% anticipated this year, driven by the increase in employer National Insurance contributions and ongoing labour shortages.
Global reciprocal tariffs and regional conflicts are heightening supply chain pressures with geopolitical uncertainty now seen as the top risk over the next year.
Power availability remains a challenge for data centre projects. Demand for data centres across Europe is projected to rise from 10 GW in 2024 to around 35 GW by 2030 and this could more than double energy consumption, from 62 terawatt-hours (TWh) today to more than 150 TWh by the end of the decade.
Michael Riordan, managing director, UK at Linesight, said: “The construction industry is benefiting from the momentum created by government policies that are focused on not only sustainability initiatives, but also data centres, life sciences and manufacturing growth strategies. However, the broader environment remains uncertain, shaped by geopolitical instability and regional conflicts that continue to influence supply chains. Trade barriers and persistent labour shortages are adding further complexity to cost planning and procurement.
“In this climate, early engagement with contractors, flexible procurement strategies and robust risk assessments are essential. Prioritising resilient supply chains and building in contingencies for cost fluctuations will be key to navigating the volatility while capitalising on long-term opportunities in sustainable and mission-critical development.”
