Navigating Stormy Skies: The Challenges in Construction
The UK construction sector continues to weather a turbulent climate in 2025. While some indicators suggest mild improvements, such as a 0.9% dip in material prices this January, underlying challenges persist, keeping overall construction costs 15–20% higher than pre-pandemic levels. For many businesses, especially SMEs, these conditions are creating a perfect storm of uncertainty, rising costs, and delayed projects.
In this article, we explore the current issues impacting the UK construction industry and how Brisan Accountancy Ltd is uniquely positioned to provide clarity, strategic guidance, and financial support.
1. Material Costs & Supply Chain Disruptions to Construction
While material prices are beginning to stabilise, they remain significantly higher than they were in 2020. This persistent inflation, coupled with global supply chain disruptions, continues to delay projects and reduce profit margins.
For smaller construction businesses, this environment presents major affordability issues—particularly when cash reserves are tight and borrowing costs are high.
How Brisan Helps:
We specialise in construction. We work with clients to develop real-time financial dashboards, track material spend against budget and across projects, and identify cost-saving and profit-making opportunities. Our detailed insight into your numbers gives you the power to make informed decisions, whether you’re pricing a new tender or renegotiating supplier terms.
2. Planning & Regulatory Uncertainty
Regulatory uncertainty is another hurdle. In February 2025, the UK government consulted on potential reforms to the National Planning Policy Framework (NPPF). While these reforms are still under review, developers and contractors are left in limbo, hesitant to move forward on large-scale projects.
Adding to the mix is the postponed Building Safety Levy, now scheduled for autumn 2026. While the delay offers authorities more preparation time, it also leaves businesses unsure about future compliance costs.
How Brisan Helps:
With our Insight and Challenge service, we support construction firms with scenario planning and financial modelling that accounts for policy delays or potential regulatory changes. This helps our clients stay agile, plan for the future, and remain compliant without compromising profitability.
3. Cashflow Pressures & Late Payments
Cashflow remains one of the most critical issues in construction today. The average invoice payment term has ballooned to 54.1 days, a five-year high and a 7% increase year-on-year. Unsurprisingly, this has pushed many businesses to the brink: in the year to 31 March 2025 alone, construction accounted for 27% of all UK trader bankruptcies, with industry-wide insolvencies up 9% compared to the previous year.
How Brisan Helps:
We don’t just file your accounts, we help you manage your cashflow proactively. From creating rolling cash forecasts to understanding your cashflow position and improving payment days with your customers, we ensure you’re not just surviving but thriving. We also assist in securing funding and improving your financial presentation for lenders and investors.
4. Labour Shortages & Rising Overheads
Post-Brexit immigration rules, pandemic-related skill losses, and an ageing workforce have combined to create a critical shortage of skilled labour. As a result, wage inflation continues to put pressure on already stretched budgets.
Meanwhile, energy costs and insurance premiums remain elevated, and construction firms are now being asked to make substantial upfront investments in environmental compliance and sustainability measures.
How Brisan Helps:
Our team can help you manage and model rising labour and energy costs, budget effectively, and plan for long-term sustainability investments. With a deep understanding of industry-specific challenges, we act as a strategic partner guiding you through budgeting, cost control, and workforce planning.
Why Choose Brisan Accountancy?
At Brisan, construction is more than just a sector we serve, it’s our specialty.
We work closely with construction firms across the UK, from subcontractors to developers, offering personalised, hands-on support. We understand the unique pain points in your business, from tendering pressures to project financing and we tailor our advice to your stage of growth and operational reality.
Whether it’s helping you:
- Set and manage budgets
- Navigate planning delays
- Secure funding
- Improve cashflow
- Plan for growth
…we’re here to support you every step of the way.
Let’s Build Your Financial Foundation
The construction industry may be facing strong headwinds, but with the right financial partner, you can stay on course.
Contact Brisan Accountancy today to learn how our expert team can help you overcome today’s challenges, and plan confidently for tomorrow.
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