Introduction
Paul Beeston
Partner – Head of Industry and Service Insight
“A value chain is focused on outcomes throughout the life of an asset and not just in its initial procurement."
Effective procurement will lead to better outcomes
Since our last Procurement Trends survey, the operating environment in construction has shifted, even if the underlying market conditions have remained somewhat familiar. We have had a new UK government, a new US president making his presence felt around the world, and significant new legislation impacting the industry. The Building Safety Act has started to see projects progress through gateways and the new Procurement Act went live earlier this year.
The data we collect is a complete cross-section of industry – looking beyond just the projects we work on. Our report highlights how procurement strategies are adapting to a fast-moving and often unpredictable market. In such conditions, aligning procurement with real-time market dynamics is not just smart – it is essential. But the decisions that projects make are impacting the performance of that project for the long term, and good procurement should not sacrifice outcomes at the whim of short-term market dynamics.
We are encouraged to see stronger collaboration between clients and contractors, reinforcing supply chain resilience. As part of this ecosystem, we know that progress happens when we share knowledge and work together. We have seen a progression over the last few years of our survey which has prompted us to change the title of the report from ‘Getting Closer to Your Supply Chain’ to last year ‘Investing in Your Supply Chain’, and this year to ‘Creating a Value Chain’.
A value chain is focused on outcomes throughout the life of an asset and not just in its initial procurement. This requires effective procurement that balances the client goals with market realities and supply chain viability. To help the industry achieve this, our report’s findings can be used to support informed decisions on contract types, routes to market and value selection criteria:
Construction market context
It is useful to place the data in our survey in the context of the economic position facing the respondents. UK construction growth has been lacklustre following the post-Covid bounce, with industry output slowing to less than 2% since the autumn of 2023.
There have also been successive periods when input costs have grown by more than tender prices, indicating margin compression. Insolvencies in the industry have continued to grow, fairing worse than many other sectors of the economy.
Against this backdrop and devoid of other motivators, contractors and clients may have been keener to replenish work and chased new projects harder. Historically in such markets, we have seen more competition been accepted, along with the willingness to take on greater risks.
However, our survey shows that both clients and contractors have been motivated to change their approaches and work more collaboratively. We are pleased to bring you this report to explore those changes and the new opportunities they bring.
Year-on-year % changes in tender prices, input costs and construction output
▉ Construction output (overall volume of work carried out across the industry)
▉ All-in Tender Price Inflation (the change in pricing levels in accepted tenders)
▉ General Building Cost Index (the change in cost base for a contractor purchasing either directly or via a supply chain)
Source: BCIS, June 2025
Methodology
The findings of this report are compiled from a survey of key figures across the supply chain, covering a range of sectors, project size and type of contractor, with the aim of gaining insight and a broad spectrum of views on a range of procurement topics.
The survey was conducted anonymously between April and early May 2025 and 108 main contractors from all parts of the UK participated. We thank them for their time and their contributions.
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