Issue 533 | 15 June 2026 - Turner & Townsend alinea

UK construction and property

UK construction output grew only 0.1% in April 2026, the slowest rate this year. Growth was driven by repair and maintenance (+0.6%), while new work fell 0.3%. Private commercial and public projects increased, but not enough to offset declines. Over three months to April, output rose 1.6%, mainly from maintenance. Firms face increasing challenges from rising costs, inflation, geopolitical tensions, and investment uncertainty.
Sizewell C plans to move more construction tasks offsite, using factory-based welding and component manufacturing, to address skills shortages and productivity risks. Leadership highlights labour constraints and efficiency as major risks, with the UK needing about 1 million more construction workers in the next decade. Modular, pre-made components aim to ease on-site labour demands and boost delivery reliability.
BBA suspension | The continued suspension of the British Board of Agrément (BBA) by the UK accreditation body United Kingdom accreditation services (UKAS) is significantly impacting the construction supply chain. Roofers have noted that delays in granting new certifications are resulting in bottlenecks for manufacturers and hindering the launch of new products.

China’s May exports rose 19.4% year-on-year, up from April’s 14.1%, despite Iran war disruptions. Imports jumped 27.4%, showing strong domestic demand. Growth was led by vehicles, tech, and AI products. Trade with the US weakened due to tariffs.
US inflation rose to 4.2% in May 2026, from 3.8% in April, the fastest rate in three years, driven mainly by higher energy and fuel prices linked to the ongoing conflict in the Middle East.
Global economic growth is projected to slow to 2.5% in 2026, down from 2.9% in 2025, due to rising inflation and borrowing costs. The World Bank has downgraded forecasts for most countries and warns the 2020s could be a “lost decade” for many developing economies. In a worst-case scenario with a worsening conflict, growth could drop to 1.3%.
Middle East deal | The US and Iran have reached a framework deal to end the war, with a formal signing planned in Switzerland. An important aspect of the agreement involves reopening the Strait of Hormuz, which is a crucial pathway for worldwide oil transportation.
ECB rates | The European Central Bank (ECB) raised interest rates by 0.25% to 2.25%, its first increase since 2023, due to rising eurozone inflation linked to Middle East conflict. The ECB also lowered its 2026 growth forecast to 0.8% from 0.9% in its previous outlook.

UK unemployment is expected to rise to 2 million (5.5%) by 2026, up from the current 1.8 million (5%), due to reduced business investment driven by higher cost inflation and concerns over consumer spending according to the Confederation of British Industry (CBI) latest economic outlook. A slight improvement to 5.3% is forecast for 2027.
UK economy | In April, the UK economy experienced a 0.1% contraction, representing its first monthly decrease in several months. However, over the three months leading up to April, the economy expanded by approximately 0.7%. The main reason for the monthly decline was a 0.2% reduction in the service sector. Economists caution that growth may slow in the coming months, with ongoing risks of inflation driven by elevated energy prices.
UK-Japan agreement | The UK and Japan are set to finalize a significant package of investment and cooperation agreements, anticipated to generate tens of thousands of jobs and bring more than £18 billion in economic benefits to the UK. This deal features over £9 billion dedicated to infrastructure and financial services, along with up to £9 billion allocated for offshore wind initiatives.

Steel tariffs | The UK government may relax upcoming steel import tariffs following industry lobbying. The British government has already granted steel buyers a three-month reprieve, also known as a “transition period,” on import duties. New tariffs and quotas are required by 1 July, when current EU-negotiated safeguards end.
Oil prices | Brent crude fell to $82/barrel, a 3-month low, after President Trump announced a peace deal with Iran. The agreement raises hopes for reopening the Strait of Hormuz, a key route for global oil and gas. However, damaged infrastructure may delay full oil flow recovery for several months.
Aluminium | Norsk Hydro has announced a second “force majeure” regarding aluminium sales from Qatar. The joint venture Qatalum unexpectedly ended a marketing agreement, which had allowed Hydro to sell its aluminium, and also signalled that it would not supply metal under current contracts. The initial force majeure was issued in March 2026 after the Middle East conflict affected gas supplies, leading to reduced production.

Fossil fuels | In 2025, the 65 biggest banks worldwide allocated $906 billion to fossil fuel companies, marking an 8% rise compared to 2024. Although they have made net-zero promises, global banks are expanding their investments in fossil fuels rather than decreasing them, underscoring a significant disconnect between climate commitments and real financial decisions.
Environmental crimes | The International Union for Conservation of Nature (IUCN) and the UN Office on Drugs and Crime (UNODC) have formed a strategic partnership to combat environmental crimes like wildlife trafficking, illegal logging, fisheries crime, and pollution tied to organized crime. They will merge IUCN’s science expertise with UNODC’s law enforcement skills to enhance prevention, detection, and prosecution.