Construction tender activity is rising across the south of England, but lengthening approval and funding processes are delaying site delivery, a new report has found.
The latest Market Intelligence Report from Southern Construction Framework (SCF) shows that while demand remains resilient, a growing number of projects are struggling to progress from tender stage to live construction activity.
Based on feedback from more than 150 subcontractors, the report found tender workload rose by 2.4% during the second quarter of 2026, with contractors reporting strong pipelines extending into 2027. However, respondents pointed to a widening gap between opportunities entering the market and projects actually reaching site.
Contractors attributed the trend to extended planning approvals, funding decisions and governance processes, all of which are lengthening pre-construction periods and delaying mobilisation. Steelwork recorded the largest rise in tender activity, up 6.3% quarter-on-quarter, followed by brickwork, up 3.1%. Tender workload is forecast to increase by a further 4.8% by the first quarter of 2027.
Janara Singh, assistant framework manager at SCF, said: “The industry continues to report healthy levels of activity and a strong pipeline of future opportunities. However, a growing challenge is the length of time projects are taking to progress through approval, funding and procurement stages before work can begin on site.
“While demand remains resilient, affordability pressures, evolving market conditions and increasing scrutiny around project viability are creating delays across the development process. This is contributing to a growing gap between opportunities entering the pipeline and projects reaching delivery.”
Build costs rose by 5.6% during the quarter and are now 8.3% higher than the same period last year, the report found. Steelwork saw the largest increase, up 10.4%, which the report links to international trade developments, tariffs and the anticipated impact of the UK’s Carbon Border Adjustment Mechanism (CBAM).
Contractors said rising costs are creating affordability challenges, particularly for projects being delivered against budgets set several years earlier. As schemes move towards procurement, the gap between historic budget assumptions and current market pricing is becoming more apparent – a trend the supply chain expects to continue, with build costs forecast to rise by a further 5.3% over the next year.
Material availability remains generally stable and supply chains continue to show resilience, the report added, though contractors warned that reduced stockholding levels and global economic uncertainty could bring further volatility to some material categories.
Adrienne Turner, framework manager at SCF, said: “In today’s market, early engagement is no longer simply a procurement preference, it is a risk management strategy. Providing contractors and specialist suppliers with greater visibility and certainty supports more accurate budgeting, stronger supply chain resilience and improved project outcomes.
“As affordability, programme and resource pressures continue to increase, organisations that engage delivery partners earlier will be better placed to manage risk, maintain project momentum and achieve successful outcomes.”
Contractors remain cautiously optimistic, forecasting continued growth in tender activity, employment and project opportunities through 2027, though respondents said improving project certainty and maintaining realistic cost assumptions will be critical to converting opportunities into deliverable projects.
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