Global construction costs set to increase 2.4% in 2026
Construction costs globally are set to rise by 2.4% in 2026, but growing uncertainty is the real challenge to project delivery.
The findings are captured in ‘Construction in 2026: Where Certainty Comes from Agility’ a new report published by Currie & Brown, a world-leading provider of cost management, project management and advisory services.
UK market: steady costs, fragile confidence
At 3.6%, the UK sits in the middle of the global range of forecast cost escalation for 2026. Public investment across multiple sectors is supporting activity, but progress is slow. High interest rates and weak growth are limiting confidence. Demand exists, but many projects are finely balanced. As a result, development is cautious and often phased in stages rather than fully committed from the start.
Nick Gray, chief operating officer, UK and Europe at Currie & Brown, said: “Cost increases in the UK remain moderate, but uncertainty is holding the market back. Many projects are only just viable, so development is moving carefully, often step by step. The Autumn Budget did little to shift that trajectory. It fell short for construction, offering no new tax incentives, increasing pressure through wage and tax changes, and providing scant detail on housing or digital infrastructure investment.
“In this environment, agility is essential. The ability to adapt quickly helps teams respond sooner, make firmer decisions, and avoid delays before they become costly.”
The global outlook
In most countries, construction costs are forecast to rise between 2% and 6%, supported by steady demand across infrastructure, healthcare, technology and industrial sectors. A small number of markets sit outside this range. In China, costs are expected to remain flat. This has weighted down the global average. In Japan, escalation could reach 10% to 12%, due to labour shortages and material pressures. These outliers highlight how local market conditions can impact costs.
But moderate cost growth does not mean a simple delivery environment. Labour shortages, shifting trade tariffs, supply chain disruption, energy price volatility, climate events, conflict and policy change are all affecting construction markets. These risks are increasingly connected. A shift in one area can quickly create problems in another.
Alan Manuel, group chief executive officer at Currie & Brown, said: “In 2026, we’re predicting moderate cost escalation across most markets. But the real challenge comes from how quickly this picture can change.
“This volatile environment means that resilience is more important than ever. And that resilience comes from planning for change early. That means using data to test options, using technology to spot pressure sooner, and being clear about what must be fixed and what needs to stay flexible.”
Certainty comes from agility
In 2026, the most successful organisations will be those that act earlier, understand where pressure is likely to build, and keep flexibility where it matters most.
With cost increases remaining moderate across most markets but uncertainty rising, the challenge is less about predicting the market and more about staying in control as conditions change. In that environment, certainty comes from agility.
How organisations can deliver with confidence in 2026
The report sets out practical steps organisations can take to stay in control and reduce cost risk, even in uncertain conditions:
- Set a realistic starting point early. Use current market data to test cost, programme and risk assumptions against real conditions and comparable projects.
- Plan for a small number of outcomes. Look at a few credible scenarios, then decide what to lock in early and where to stay flexible.
- Check labour and market capacity by location and phase. If skills or resources are tight, adjust scope, sequencing or procurement before plans are locked in.
- Make key decisions sooner. Confirm phasing, requirements and long-lead items earlier to reduce exposure later.
- Use technology to spot pressure earlier. Focus on tools that improve visibility, shorten decision cycles, and support faster, clearer choices.