It is fair to say that since the first Build North Expo back in February, the landscape of global construction has shifted.

As the construction industry heads into the second half of 2025, firms across the UK are contending with a changing global trade environment, shifting policy landscapes, and ongoing cost pressures.

While domestic demand remains relatively stable—especially in infrastructure and retrofit markets—rising material costs and international trade tensions are reshaping business strategies.

One of the most consequential developments has been the return of Donald Trump to the U.S. presidency and the implementation of sweeping tariffs on imports, including steel and aluminium.

The knock-on effects are already being felt in the UK construction supply chain.

Key Market Trends

  • Material inflation persists, driven by ongoing volatility in global supply chains and increased tariffs on key inputs such as steel and aluminium.

  • Public infrastructure remains a bright spot, buoyed by government spending commitments and new project starts across roads, schools, and utilities.

  • Labour shortages continue, though stabilisation in some areas is helping to ease pressure on project delivery.

  • Retrofit and decarbonisation work is growing, particularly in social housing and commercial property, as net-zero deadlines draw nearer.

Tariffs and Trade: Trump’s Return Sends Shockwaves

In early 2025, President Donald Trump reintroduced broad tariffs on imports to the U.S., including:

  • A 10% general tariff on all imports

Why It Matters for the UK Construction Sector:

  • Material prices have risen further, especially for products linked to international commodity markets.

  • Steel manufacturers in the UK exporting to the U.S. face new barriers, affecting domestic supply and pricing.

  • Supply chain instability is leading to longer lead times, reduced stock availability, and greater procurement risk.

  • Contractors are revising terms, adding fluctuation clauses or revisiting fixed-price deals to account for increased volatility.

What Firms Are Doing to Adapt

  • Sourcing locally where possible to avoid exposure to international tariffs and shipping delays.

  • Strengthening supplier relationships to secure allocation and pricing stability.

  • Investing in technology and digital tools, including BIM and supply chain analytics, to improve forecasting and reduce waste.

  • Revisiting contract terms to build in protections against rapid cost changes and logistical delays.

Sector Outlook: Growth in Pockets, Pressure in Others

Despite global turbulence, the UK construction sector remains broadly resilient. Activity levels are expected to hold steady or improve slightly in several key areas:

  • Infrastructure: National Highways, local authority projects, and rail upgrades continue to provide a pipeline of work.

  • Residential retrofit: Demand for energy-efficiency upgrades is growing, supported by both regulation and consumer interest.

  • Commercial refurbishment: Office and retail spaces are being upgraded to meet sustainability standards and new tenant demands.

Areas under pressure:

  • New private housebuilding, which remains sluggish due to interest rates and softening demand.

  • Large-scale commercial starts, especially where imported materials dominate or financing remains constrained.

Final Thoughts

The second half of 2025 will test the sector’s ability to remain agile and forward-looking.

Trade tensions, particularly from the U.S., are pushing up costs and complicating procurement. But with stable public sector investment, growing demand for green upgrades, and a shift toward smarter project delivery, there are still opportunities to be seized.

Firms that embrace flexibility, prioritise supply chain resilience, and lean into innovation are best placed to navigate what’s shaping up to be a complex but active end to the year.

The outlook for UK construction be one of the key topics of discussion at Build North expo, register your attendance here: https://www.buildnorthexpo.co.uk/attend/