Contractors are being encouraged to strengthen their planning efforts to avoid being caught off guard by new disruptions in the global supply chain.
A recent report by insurer QBE, developed in collaboration with global risk consultancy Control Risks, highlights that newly introduced international tariffs on essential materials such as steel, aluminium, and timber are already driving up costs and affecting project viability.
UK-based firms are especially vulnerable due to their significant dependence on imported aluminium and American timber—both of which have become more expensive as trade disputes intensify.
The report also notes a 29% spike in copper prices during early 2025, driven by escalating trade barriers and surging global demand from renewable energy and electric vehicle sectors.
Contractors are now facing mounting pressure on multiple fronts. Labour shortages, rising material costs, and the need to meet net-zero objectives are converging, significantly increasing project risks heading into the latter half of the year.
This warning comes as the construction products manufacturing sector saw a return to growth in Q2 2025, according to the Construction Products Association’s latest State of Trade Survey.
While suppliers expressed optimism about increased sales over the next year, they also flagged ongoing cost pressures across the supply chain—alongside rising wages and salaries compared to the same period last year. This trend follows the National Living Wage increase in April, which triggered uplifts across related pay brackets, as well as higher National Insurance Contributions.
Neil Fleming, UK construction and engineering portfolio manager at QBE, said: “The confluence of global supply chain disruptions, rising material costs, labour shortages and sustainability goals presents a complex risk landscape for the UK construction sector.”
The report underlines the need for contractors to adopt more strategic approaches to sourcing, logistics, and risk management to safeguard both project timelines and financial resilience.
