Issue 535 | 29 June 2026 - Turner & Townsend alinea

UK construction and property

Material strategy | Experts advised Parliament that the UK needs a coordinated construction materials strategy to support new towns, mapping required materials and timelines. A clear demand pipeline would encourage manufacturers to invest, ensuring materials are available for major projects.
Construction wages fell 0.4% year-on-year to April 2026, the only sector with a decline. This was due to weak demand, subdued activity, firms focusing on cost control rather than pay increases, and low recruitment pressure. Wage growth is expected to be subdued until demand rises.
Heat risk | A survey of 300+ industry participants shows heatwaves are already impacting UK construction safety, productivity, and costs, with many firms unprepared. 50% of firms reported higher costs and delays which led to rescheduled work, postponing certain activities and increased rest breaks. No maximum legal working temperature currently exists in the UK, raising worker protection concerns.
Brexit | A YouGov survey of 136 construction professionals in February found that 59% viewed Brexit as a mistake. Brexit continues to affect logistics: 10% of UK companies experience supply chain challenges, and nearly two-thirds of construction businesses note increased delivery times due to Brexit, although it’s not the primary driver of costs.

BIS | The Bank of International Settlements (BIS), often called the central bank of central banks, in its latest report warns the global economy faces multiple interconnected risks from rising inflation, uncertainty from the AI investment surge, financial market fragility to high public debt, all threatening financial stability if not managed well.
Economic fragmentation | A new World Economic Forum (WEF) report warns that growing global economic fragmentation could cut global GDP by up to $6.9 trillion (around 6% of global output) in the worst case. Current fragmentation costs $213-307 billion yearly and raises global inflation by 0.2-0.3%. The report also highlights the trend now affects not just rivals but also allies, signalling a structural shift in how the global economy operates.
Global growth | The latest outlook from Barclay’s predicts global growth of 3.1% in 2026, slightly below 2025. Growth is expected to stay strong in the US and east Asia, but weak in Europe and China. Inflation remains high in most developed countries, leading to more cautious, selective investing.

Wage comparison | People born between 1996-2000 earn about 15% (£3,700) more per year than millennials did at the same age, thanks to early career gains and higher minimum wages. However, housing remains unaffordable, so better pay hasn’t improved living conditions according to research from the resolution foundation.
Economic hit | Bank of England data shows Brexit reduced the UK economy by around 6% over 10 years, mainly due to post-2016 uncertainty and increased trade barriers/costs, based on a decade of firm-level analysis.
UK-EU partnership | Ahead of the European Partnership Bill and UK-EU Summit, the most recent Institute of Directors (IOD) survey reveals that 52% of business leaders now want the EU prioritized as the UK’s main trading partner, up from 35% in April 2025. While most support closer ties, 75% stress keeping UK regulatory independence.
UK mortgage approvals hit a 2.5-year low, signalling a housing market slowdown. Reduced affordability and demand are driven by high borrowing costs, uncertainty and rising gilt yields, which increase banks’ funding costs and mortgage rates.
Political leadership | Andy Burnham has set out a broad vision for governing the UK, centred on devolution and regional empowerment. He wants to apply a “Manchesterism” model across the UK with more local control and stronger regional leadership.

Oil | The US has lifted sanctions on Iranian oil exports for 60 days to aid peace talks. Oil prices have fallen to $72 per barrel, returning to pre-war levels.
Steel tariffs | The UK government will cut steel tariff quotas by 51% (not 60%) from July 1, 2026, allowing 3.2 million tonnes of duty-free imports. Manufacturers using 11 steel types not produced in the UK will be exempt from tariffs.
Aluminium tax | The EU plans to introduce a fee on aluminium scrap exports to stop valuable metal from being sent to the US and Asia. This proposed 15% levy marks the first instance of Brussels applying charges to goods leaving the bloc.
Critical minerals | The UK government is investing £50 million to strengthen critical minerals supply chains, reduce reliance on overseas suppliers, boost domestic production, support economic security and growth, and create high-value jobs nationwide.

Heat resilience plan | The Mayor of London has launched the city’s first heat resilience plan to address overheating risks in about one million homes. Climate change could cut London’s GDP by up to 3% by the 2050s. The plan features more cooling and drinking water spaces, upgrades to vulnerable homes, expanded green and blue spaces, and stronger health and infrastructure systems.
Heat-related productivity loss | Extreme heat poses a major economic risk, reducing productivity above 30°C and increasing cooling costs. From 2026-2030, France may lose $240 billion, Italy $147 billion, and Spain $120 billion—up to 7% of GDP for some nations.