{
  "query": "UK construction inflation 2026 contractor performance benchmarks NEC4",
  "raw_results": [
    {
      "url": "https://www.tmhcc.com/en/news-and-articles/thought-leadership/uk-construction-sector-report-april-2026",
      "title": "UK Construction Sector Report: April 2026 - Tokio Marine HCC",
      "content": "#### Channel 2: Financial Market Tightening\n\nHigher inflation expectations have driven up UK gilt yields and\ncorporate borrowing costs. For construction, two transmission\nroutes matter most. First, developer and contractor borrowing:\nthe effective rate on new loans to UK private non-financial\ncorporations had fallen from a 2024 peak of 7.26% to around\n5.66% by February 2026 – a partial reprieve that had been baked\ninto project financial models. That reprieve has now been eroded,\neffectively reversing months of gradual easing in a matter of weeks. [...] This dynamic was already evident before the conflict. Large contractors had been deferring the conversion of approved projects into starts, awaiting domestic policy clarity on planning reform and building safety regulation. The conflict has compounded that hesitancy into something closer to a systemic pause. The Glenigan Index7 for Q1 2026 illustrates the scale of the deterioration: the overall index is down 10.3% q/q. In March 2026, residential construction starts were 29.8% below the same month last year and civil engineering starts 33.5% lower, while only non-residential starts in positive territory at 4.9% above March 2025 – and that uptick largely reflects a single major London office development rather than any broadening of conditions. The conversion of a strong approvals pipeline [...] One of the sector’s few genuine improvements heading into\n2026 was the normalisation of input cost inflation. Construction\nmaterial prices had dipped into mild deflation in mid-2023\nfollowing the 2022 peak. Output price inflation, running at 2.7%\ny/y in September 2025 (the latest available ONS data13 had,\nfor the first time in several years, exceeded input price inflation,\nproviding some relief to margins that had been compressed for\nyears. At the 2022 peak, input price inflation reached around\n25% y/y while output price inflation peaked at 12% - a gap of\n13 percentage points that eroded sector balance sheets over\nan extended period and from which many firms had not fully\nrecovered before the current shock arrived. That supportive\ndynamic is now at serious risk of reversal",
      "score": 0.58408195,
      "raw_content": null
    },
    {
      "url": "https://edzarenski.com/2026/05/13/construction-cost-inflation-2026/",
      "title": "Construction Cost Inflation – 2026 « Construction Analytics",
      "content": "Since 2011, Nonresidential Bldgs inflation averages 4.7%, Residential is 5.2% and Non-bldg is 3.8%. But those averages include the unusually high inflation years of 2021 and 2022. Without those two years, since 2011, average inflation for Nonres Bldgs is 3.9%, Residential is 3.9% and Non-bldg is 2.5%.\n\n### April 2026 Inflation YTD, Nonresidential Bldgs +4.4%, Residential +4.3% and Non-bldg +3.9%.\n\n### Types of Construction Inflation Indices\n\nGeneral construction cost indices and Input price indices that don’t track whole building final cost do not capture the full cost of inflation on construction projects. [...] Long-term construction cost inflation is normally about double consumer price index (CPI).\n In times of high construction spending growth, nonresidential construction annual inflation averages about 8%. Residential has gone as high as 10%.\n Nonresidential buildings inflation (prior to 2021-2022) averaged 3.7% since the recession bottom in 2011. Six-year 2014-2019 average is 4.4%.\n Residential buildings inflation (prior to 2021-2022) reached a post-recession high of 8.0% in 2013 but dropped to 3.5% in 2015. It has averaged 5.3% for 8 years 2013-2020.\n Although inflation is affected by labor and material costs, a large part of the change in inflation is due to change in contractors’ and suppliers’ margins. [...] Since 2011, Nonresidential Bldgs inflation averages 4.7%, Residential is 5.2% and Non-bldg is 3.8%. But those averages include the unusually high inflation years of 2021 and 2022. Without those two years, since 2011, average inflation for Nonres Bldgs is 3.9%, Residential is 3.9% and Non-bldg is 2.5%.",
      "score": 0.477969,
      "raw_content": null
    },
    {
      "url": "https://www.arcadis.com/en-gb/insights/perspectives/europe/united-kingdom/uk-construction-market-view-spring-2026",
      "title": "UK Construction Market Outlook Spring 2026 - Arcadis",
      "content": "The Spring 2026 Arcadis UK Market View examines the forces shaping the UK construction market, from shifts in sector performance and regional activity to emerging cost pressures and long-term infrastructure investment.\n\n## UK construction industry trends, growth, and inflation insights\n\nThe Spring 2026 Arcadis UK Market View provides a data-driven perspective on the forces shaping the UK construction sector. The report combines market research and analysis, sector insights, and forward-looking forecasts to help industry leaders navigate an uncertain recovery.\n\nConstruction growth and sector performance analysis—how residential, commercial, infrastructure, and public sectors are diverging in a two-speed recovery. [...] What is the forecast for UK construction inflation?\n\n  Construction cost inflation is expected to remain moderate in the near term due to soft demand and competitive pressure across supply chains. However, rising commodity and energy prices, labour shortages, and increased infrastructure investment could create renewed inflationary pressure as market activity strengthens.\n How will building costs change in 2026? [...] ## The state of the construction market in the UK\n\nThe UK construction sector has entered 2026 facing an uneven recovery. After a promising start to 2025, activity slowed significantly in the second half of the year, with new build output declining even as the pipeline of future work continued to grow.\n\nAffordability pressures, regulatory complexity, and delayed investment decisions are slowing the conversion of projects from planning to delivery, particularly in the residential sector. At the same time, other parts of the market—including commercial development and infrastructure investment—are showing early signs of renewed momentum.",
      "score": 0.40641484,
      "raw_content": null
    },
    {
      "url": "https://www.neccontract.com/news/using-key-performance-indicators-to-improve-how-nec-contracts-are-used?srsltid=AfmBOopjc-IcmuDh8YC9iD894zSVu0SqDRi6RqhXSVqKEs6PFnbSBMXl",
      "title": "Using key performance indicators to improve how NEC contracts are used | News | NEC Contracts",
      "content": "NEC4 provides for KPIs in secondary option X20. This is done via an ‘Incentive Schedule’, in which the client can set out targets and include amounts to be paid to the contractor if specific targets are met or exceeded. It also establishes the process for performance monitoring and reporting as measured by the KPIs. Prevention is more effective than cure and therefore this should be at the heart of the KPI approach. [...] ## Key Points\n\n Key performance indicators (KPIs) are quantifiable measures that compare performance against objectives.\n In NEC contracts KPIs can be used to incentivise contractors through option X20 as well as multiple contractors on the same project through option X12.\n A standard set of ‘contract-health-check’ KPIs is proposed for to improve how all NEC contracts are used.\n\nThe construction industry needs to continually improve the way it delivers capital projects, ensuring the intended benefits of the investment at the same time as meeting ever-more-demanding social and environmental targets. In NEC4 contracts one of the most effective ways to ensure continually improving project outcomes is through key performance indicators (KPIs).\n\n## What is a KPI? [...] | Key Performance Indicator Number | Aspect of performance | Key performance indicator description | Target performance | Amount the contractor is payed if the target stated is improved upon or achieved |\n| KPI-1.1 | Programme acceptance | Number of days since last acceptance by the project manager of a revised programme. | Maximum 31 days | £ nil |\n| KPI-1.2 | Programme acceptance | For the last accepted programme, the number of days between submission of the revised programme and acceptance of the programme by the project manager. | Maximum 7 days | £ nil |\n| KPI-1.3 | Time (terminal float) | Number of weeks that planned completion is in advance of the completion date. | Remains constant or increases | £ nil |",
      "score": 0.35240287,
      "raw_content": null
    },
    {
      "url": "https://gmhplanning.co.uk/nec-downloads/nec4-x20-key-performance-indicators/",
      "title": "X20 Key Performance Indicators (KPIs) - CECA Bulletin 41",
      "content": "Skip to content\n\nGMH Planning Ltd NEC Training NEC3 NEC4 Contract Consultancy Logo\n\nGMH Planning – NEC Training\n\nExperts in the New Engineering Contract\n\nshopping\\_cart\n\nNEC4 Training Training Courses\")  NEC4 Public Training  NEC Advice Advice and Project Planning Guidance\")  NEC Guidance Notes  Free Downloads  NEC FAQs  NEC People Conference  NEC4 Webinar  Blog  Contact\n\nNEC Downloads & Publications \n\nCover image for CECA NEC4 Bulletin CECA Member Briefings by GMH Planning Ltd\n\n# X20 Key Performance Indicators (KPIs) – CECA Bulletin 41\n\n timer   8 Minutes read time\n tag   CECA Bulletins\n tag   Primary & secondary options",
      "score": 0.27724102,
      "raw_content": null
    }
  ],
  "formatted": "Source: UK Construction Sector Report: April 2026 - Tokio Marine HCC\nURL: https://www.tmhcc.com/en/news-and-articles/thought-leadership/uk-construction-sector-report-april-2026\n#### Channel 2: Financial Market Tightening Higher inflation expectations have driven up UK gilt yields and corporate borrowing costs. For construction, two transmission routes matter most. First, developer and contractor borrowing: the effective rate on new loans to UK private non-financial corporations had fallen from a 2024 peak of 7.26% to around 5.66% by February 2026 – a partial reprieve that had been baked into project financial models. That reprieve has now been eroded, effectively reversing months of gradual easing in a matter of weeks. [...] This dynamic was already evident before the conflict. Large contractors had been deferring the conversion of approved projects into starts, awaiting domestic policy clarity on planning reform and building safety regulation. The conflict has compounded that hesitancy into something closer to a systemic pause. The Glenigan Index7 for Q1 2026 illustrates the scale of the deterioration: the overall index is down 10.3% q/q. In March 2026, residential construction starts were 29.8% below the same month last year and civil engineering starts 33.5% lower, while only non-residential starts in positive territory at 4.9% above March 2025 – and that uptick largely reflects a single major London office development rather than any broadening of conditions. The conversion of a strong approvals pipeline [...] One of the sector’s few genuine improvements heading into 2026 was the normalisation of input cost inflation. Construction material prices had dipped into mild deflation in mid-2023 following the 2022 peak. Output price inflation, running at 2.7% y/y in September 2025 (the latest available ONS data13 had, for the first time in several years, exceeded input price inflation, providing some relief to margins that had been compressed for\n\n---\n\nSource: Construction Cost Inflation – 2026 « Construction Analytics\nURL: https://edzarenski.com/2026/05/13/construction-cost-inflation-2026/\nSince 2011, Nonresidential Bldgs inflation averages 4.7%, Residential is 5.2% and Non-bldg is 3.8%. But those averages include the unusually high inflation years of 2021 and 2022. Without those two years, since 2011, average inflation for Nonres Bldgs is 3.9%, Residential is 3.9% and Non-bldg is 2.5%. ### April 2026 Inflation YTD, Nonresidential Bldgs +4.4%, Residential +4.3% and Non-bldg +3.9%. ### Types of Construction Inflation Indices General construction cost indices and Input price indices that don’t track whole building final cost do not capture the full cost of inflation on construction projects. [...] Long-term construction cost inflation is normally about double consumer price index (CPI). In times of high construction spending growth, nonresidential construction annual inflation averages about 8%. Residential has gone as high as 10%. Nonresidential buildings inflation (prior to 2021-2022) averaged 3.7% since the recession bottom in 2011. Six-year 2014-2019 average is 4.4%. Residential buildings inflation (prior to 2021-2022) reached a post-recession high of 8.0% in 2013 but dropped to 3.5% in 2015. It has averaged 5.3% for 8 years 2013-2020. Although inflation is affected by labor and material costs, a large part of the change in inflation is due to change in contractors’ and suppliers’ margins. [...] Since 2011, Nonresidential Bldgs inflation averages 4.7%, Residential is 5.2% and Non-bldg is 3.8%. But those averages include the unusually high inflation years of 2021 and 2022. Without those two years, since 2011, average inflation for Nonres Bldgs is 3.9%, Residential is 3.9% and Non-bldg is 2.5%.\n\n---\n\nSource: UK Construction Market Outlook Spring 2026 - Arcadis\nURL: https://www.arcadis.com/en-gb/insights/perspectives/europe/united-kingdom/uk-construction-market-view-spring-2026\nThe Spring 2026 Arcadis UK Market View examines the forces shaping the UK construction market, from shifts in sector performance and regional activity to emerging cost pressures and long-term infrastructure investment. ## UK construction industry trends, growth, and inflation insights The Spring 2026 Arcadis UK Market View provides a data-driven perspective on the forces shaping the UK construction sector. The report combines market research and analysis, sector insights, and forward-looking forecasts to help industry leaders navigate an uncertain recovery. Construction growth and sector performance analysis—how residential, commercial, infrastructure, and public sectors are diverging in a two-speed recovery. [...] What is the forecast for UK construction inflation? Construction cost inflation is expected to remain moderate in the near term due to soft demand and competitive pressure across supply chains. However, rising commodity and energy prices, labour shortages, and increased infrastructure investment could create renewed inflationary pressure as market activity strengthens. How will building costs change in 2026? [...] ## The state of the construction market in the UK The UK construction sector has entered 2026 facing an uneven recovery. After a promising start to 2025, activity slowed significantly in the second half of the year, with new build output declining even as the pipeline of future work continued to grow. Affordability pressures, regulatory complexity, and delayed investment decisions are slowing the conversion of projects from planning to delivery, particularly in the residential sector. At the same time, other parts of the market—including commercial development and infrastructure investment—are showing early signs of renewed momentum.\n\n---\n\nSource: Using key performance indicators to improve how NEC contracts are used | News | NEC Contracts\nURL: https://www.neccontract.com/news/using-key-performance-indicators-to-improve-how-nec-contracts-are-used?srsltid=AfmBOopjc-IcmuDh8YC9iD894zSVu0SqDRi6RqhXSVqKEs6PFnbSBMXl\nNEC4 provides for KPIs in secondary option X20. This is done via an ‘Incentive Schedule’, in which the client can set out targets and include amounts to be paid to the contractor if specific targets are met or exceeded. It also establishes the process for performance monitoring and reporting as measured by the KPIs. Prevention is more effective than cure and therefore this should be at the heart of the KPI approach. [...] ## Key Points Key performance indicators (KPIs) are quantifiable measures that compare performance against objectives. In NEC contracts KPIs can be used to incentivise contractors through option X20 as well as multiple contractors on the same project through option X12. A standard set of ‘contract-health-check’ KPIs is proposed for to improve how all NEC contracts are used. The construction industry needs to continually improve the way it delivers capital projects, ensuring the intended benefits of the investment at the same time as meeting ever-more-demanding social and environmental targets. In NEC4 contracts one of the most effective ways to ensure continually improving project outcomes is through key performance indicators (KPIs). ## What is a KPI? [...] | Key Performance Indicator Number | Aspect of performance | Key performance indicator description | Target performance | Amount the contractor is payed if the target stated is improved upon or achieved | | KPI-1.1 | Programme acceptance | Number of days since last acceptance by the project manager of a revised programme. | Maximum 31 days | £ nil | | KPI-1.2 | Programme acceptance | For the last accepted programme, the number of days between submission of the revised programme and acceptance of the programme by the project manager. | Maximum 7 days | £ nil | | KPI-1.3 | Time (terminal float) | Num\n\n---\n\nSource: X20 Key Performance Indicators (KPIs) - CECA Bulletin 41\nURL: https://gmhplanning.co.uk/nec-downloads/nec4-x20-key-performance-indicators/\nSkip to content GMH Planning Ltd NEC Training NEC3 NEC4 Contract Consultancy Logo GMH Planning – NEC Training Experts in the New Engineering Contract shopping\\_cart NEC4 Training Training Courses\") NEC4 Public Training NEC Advice Advice and Project Planning Guidance\") NEC Guidance Notes Free Downloads NEC FAQs NEC People Conference NEC4 Webinar Blog Contact NEC Downloads & Publications Cover image for CECA NEC4 Bulletin CECA Member Briefings by GMH Planning Ltd # X20 Key Performance Indicators (KPIs) – CECA Bulletin 41 timer 8 Minutes read time tag CECA Bulletins tag Primary & secondary options"
}