Construction firms are being urged to “future-proof” their workforces as the sector continues to grapple with a shortage of skilled workers.

The warning came as global professional services company Turner & Townsend published its Spring 2025 UK Construction Market Intelligence report (UKMI).

The report also stated construction costs remain stubbornly high, with global disruption and uncertainty unlikely to alleviate.

The UKMI shows tender price inflation (TPI) in the industry is not set to fall, despite construction materials price inflation having eased from the previous record highs.

As the UK government works to boost development across real estate and infrastructure, Turner & Townsend is forecasting that TPI rates over the next three years will remain relatively unchanged. 

Real estate inflation from 2026 to 2029 is predicted to stay constant at 3.5%, while infrastructure inflation over the period is expected to remain at 5%. 

At the root of these predictions is rising wage growth caused by intense competition for a small pool of qualified workers across the sector. 

Five years on from the pandemic, construction’s share of the UK labour force is currently at a record low, with sector employment down 3.4% year on year. 

Despite new government initiatives such as Skills England, and attempts to boost apprenticeship numbers, Turner & Townsend says the future is currently looking uncertain. 

The Construction Industry Training Board (CITB) estimates that the average age of a UK construction worker is now over 50.

Wage rises are outweighing the otherwise disinflationary factors the sector is currently experiencing. 

New work, an indicator of demand, fell 2.4% on the quarter, according to the Office for National Statistics (ONS) and key material prices are falling, with the Department for Business and Trade reporting a 3.1% quarterly decline for structural steel, and a 2.4% fall for sawn wood. 

However, newly announced American tariffs on materials like steel may see this trend start to reverse.

In this period of uncertainty, Turner & Townsend is calling on firms to focus on consolidating and improving the skills they have, while laying the groundwork for future talent. 

This should include teaching new skills for the future to existing workforces, and retraining employees into specialisms that better match current demand, such as digital skills and expertise in modern methods of construction. 

More must also be done to improve retention – recognising career progression, inclusion, and psychological safety to ensure talent remains in the construction sector at this crucial moment.

Martin Sudweeks, UK managing director of cost management at Turner & Townsend, said: “One only has to look at the slate of current and upcoming announcements to see how central the construction sector is to the UK’s economic and social goals – from the recent Planning and Infrastructure Bill to the hotly anticipated industrial and infrastructure strategies.  However, multiple headwinds will challenge our ability to deliver against these ambitions. 

“All eyes are set particularly closely on US tariffs.  But while there remains significant uncertainty around how these tariffs will evolve and the resulting impacts across the globe, we need to ensure we are not taking our focus off those issues which are within our power to solve – our people problem being one of the most critical.

“Half a decade on from the disruption of the Covid-19 pandemic, year-on-year employment is still shrinking.  We need to radically rethink how we attract talent – looking to a wider set of disciplines, backgrounds and skills that will deliver the modern, digitally-enabled, creative construction workforce of the future.”

Click here to read the full report.