IN Brief:
- Inflation pressure is moderating compared with 2021–2024 peaks.
- Tariffs and supply disruptions remain key swing factors for commodities.
- Procurement strategies are shifting toward optionality and faster decisions.
Currie & Brown’s latest construction market outlook points to a more stable environment for materials inflation in 2026, but with volatility still entrenched as a risk that can move budgets quickly and without much warning.
After several years where the baseline assumption for many projects was “prices will rise again before we buy”, the current message is more nuanced: broad inflation pressure is easing, but the market remains vulnerable to sudden shocks. For contractors and cost managers, that translates into fewer blanket uplifts across every trade and commodity, alongside a heightened need to track specific pinch points that can still spike hard — particularly where supply chains are internationally exposed.
The firm’s analysis flags disruption risk as the constant. Even when headline inflation is lower, price movement can be dictated by a small number of variables: freight availability, geopolitical disruption, energy cost swings that feed into manufacturing inputs, and changes in trade tariffs that can re-route supply or make certain sources uneconomic overnight.
In practice, procurement teams are responding by tightening the gap between design freeze and buying, and by protecting optionality. That can mean dual-sourcing where specifications allow, earlier engagement with manufacturers on lead-time items, and greater use of substitutions that have already been technically signed off rather than being introduced mid-project under time pressure.
Contract strategy is being shaped by the same reality. Index-linked pricing can reduce contention when volatility hits, but only if clients and contractors agree up front which indices are relevant and how adjustments will be administered. Fixed-price packages remain achievable, but they increasingly come with shorter validity periods and clearer exclusions, particularly on commodities with thin stock cover.
For UK and US markets, the core operational implication is that “stabilising” should not be read as “predictable”. The baseline may be calmer, but procurement discipline — timely approvals, clear specifications, and realistic lead-time assumptions — remains the most effective hedge against a year where a single tariff change or logistics interruption can still push a critical material category off-plan.
