A new report from insurer QBE, in partnership with global risk consultancy Control Risks, warns that recent international tariffs on key materials like steel, aluminium and timber are already pushing up costs and impacting jobs.

UK firms are particularly exposed due to their heavy reliance on imported aluminium and American timber — both now more expensive due to escalating trade rows.

The report also highlights copper prices surging 29% in early 2025, fuelled by trade barriers and global demand from renewable energy and electric vehicle projects.

Pressure is building from all sides. Labour shortages, net-zero targets and material inflation are all converging to squeeze contractors further, with project risks rising sharply in the second half of the year.

The report comes as Construction products manufacturing returned to growth in the second quarter of 2025, according to the Construction Products Association’s latest State of Trade Survey.

Suppliers are now more confident of a rise in sales over the next 12 months but flagged up long-standing price pressures in the supply chain and increase in wages and salaries compared to a year earlier. This follows April’s rise in the National Living Wage – spurring increases in subsequent pay grades – and the rise in National Insurance Contributions.

Neil Fleming, UK construction and engineering portfolio manager at QBE, said: “The confluence of global supply chain disruptions, rising material costs, labour shortages and sustainability goals presents a complex risk landscape for the UK construction sector.”

The report stresses that contractors must take a more strategic approach to sourcing, logistics and risk management if they want to maintain project delivery and financial stability.