Midlands
Birmingham entered 2026 with renewed momentum across key sectors. Commercial activity is improving, with growing demand for Grade A office space. Infrastructure continues to anchor the region’s outlook, with progress on the Midlands Metro extensions, HS2 at Curzon Street and the Camp Hill line set to unlock new development capacity.
Sentiment in the residential sector is also slowly lifting, with build‑to‑rent leading a pipeline of ready‑to‑start sites across Digbeth and Eastside. As more schemes move toward procurement, main contractors are becoming increasingly selective, emphasising risk‑sharing and early supply‑chain engagement. The picture is nuanced at different tiers of contractor and different sector specialisms.
Overall, the region’s near‑term outlook points to muted and fragile growth gathering momentum, with medium‑term growth supported by sustained public investment and rising development activity.
MARKET CONDITIONS & PIPELINE
Second city's development pipeline strengthened by regeneration schemes and growing investor confidence
Birmingham’s development pipeline for 2026 shows signs of renewed strength, supported by new regeneration areas and increasing investor confidence. Commercial growth remains robust, with prime office space in short supply and what is available is consistently taken up by high‑quality occupiers.
Major regeneration zones such as Smithfield and Paradise will continue to attract flagship tenants, while the evolving Knowledge Quarter development is emerging as one of the city’s most exciting growth engines.
Infrastructure investment will intensify with continued progress on the Midlands Metro extensions, including routes anticipated to serve the upcoming Sports Quarter: a major catalyst expected to stimulate surrounding commercial, leisure and residential schemes. HS2 activity at Curzon Street and the long‑awaited Camp Hill line reopening will add significant connectivity benefits. Logistics and manufacturing remain steady, with strong appetite for modern warehousing and sustained refurbishment activity.
Residential development is poised for a rebound, with cleared sites ready to start across Digbeth, Smithfield and Eastside, with build‑to‑rent leading demand, but purpose-built student accommodation is struggling for viability. Overall tender prices stabilising at around 3.5% offer welcome certainty, contributing to a broadly positive outlook for Birmingham’s construction market in 2026.
RLB Market Activity Cycle
The RLB Market Activity Cycle is a representation of the development activity cycle for the construction industry.
RLB considers 10 sectors to be representative of the construction industry as a whole. Each sector is assessed as to which of three activity level zones – peak, mid or trough – best represents the current status of the sector within the cycle. This assessment is then refined by identifying whether the current status is in a growth phase or a decline phase.
The subjective current performance of sectors is identified by ascribing one of the coloured arrows (shown in the legend of the chart) to each sector. NB: In this analysis, sectors are not individually weighted.
▲ Peak Growth ▲ Mid Growth ▲ Trough Growth
▼ Peak Decline ▼ Mid Decline ▼ Trough Decline
Market sector activity analysis: UK
▲ Peak Growth ▲ Mid Growth ▲ Trough Growth
▼ Peak Decline ▼ Mid Decline ▼ Trough Decline
Consolidating the results of multiple regions enables the calculation of a national representation of percentage of sectors in each phase of the cycle at a point in time.
Market sector activity analysis: MIDLANDS
▲ Peak Growth ▲ Mid Growth ▲ Trough Growth
▼ Peak Decline ▼ Mid Decline ▼ Trough Decline
Consolidating the results of a region enables the calculation of a regional representation of percentage of sectors in each phase of the cycle at a point in time.
TENDER PRICES
- Tender prices in and around Birmingham are generally stable with forecasts anticipating an uptick of around 3.5% over 2026, and much the same thereafter.
- After several years of volatility, this relative stability is welcomed by the construction sector and gives some level of certainty for the year ahead, subject of course to any sudden, unexpected external factors.
- There is evidence of tender pricing being driven at different rates by sectors and size of contractor.
▉ RLB Midlands
▉ BCIS (National) TPI ▉ BCIS (GBCI)
▉ Competitors' range (High & Low)
INPUT COSTS
- Strong demand in key packages, including MEP, masonry and steelwork, combined with a continuing skills shortage are leading to increased tender prices. MEP prices, in particular, face cost uncertainty due to volatility of global supply pressures, component availability and energy prices.
- Margins continued to be somewhat strained with labour cost increases. Ongoing large-scale infrastructure projects such as HS2 and new major developments expected in 2026 look set to drive up the cost of specific packages.
- There is a sense that there are more projects on the horizon, meaning main contractors are expected to be more selective in their tendering strategies despite short-term pipeline pressures.
SECTOR FOCUS
Commercial
Birmingham’s commercial construction sector is slowly strengthening, driven by sustained demand for high‑quality office space and major regeneration programmes. The supply of premier office space remains tight and what is available is being taken by some flagship tenants. Commercial works will take a large slice of the Smithfield regeneration scheme, and there are similarly strong expectations for the Knowledge Quarter project. The Paradise development continues to attract high-calibre tenants, adding to the positive outlook for the sector.
Infrastructure
Substantial funding is in place for the continuation of the West Midlands Metro expansion programme, which will connect the new Sports Quarter and unlock substantial new development land. Construction of the main build at HS2’s Curzon Street station is expected to start soon. Many years in the making, the new Camp Hill line is expected to open in 2026, while the Midlands Rail Hub improvement scheme will create additional services through increased track capacity, junction remodelling and signal modernisation.
Logistics & Manufacturing
We expect the logistics and manufacturing sector to remain relatively solid in Birmingham and across the Midlands. Demand continues for modern warehouses and the mid-box logistics subsector remains strong. While speculative new starts are reduced compared to historic levels, pre-let deals and overall refurbishments continue, contributing to the sector’s stability.
Residential
Following a fallow couple of years, there is a growing level of optimism among residential developers despite the national and global financial situation, and the minefield of unknowns generated by the Building Safety Regulator’s gateway process. Developers are preparing a number of cleared sites for construction in 2026, in areas around Digbeth, Smithfield, Eastside, Muse Mell Square, the Jewellery Quarter, and the Knowledge Quarter. Strong rental growth points toward built-to-rent being the biggest area of activity but there is also a potential increase in purpose-built student accommodation, both in the city centre and closer towards the main university campuses. However, this is offset by viability challenges in an increasingly expensive market.
CASE STUDY
School of Architecture and Built Environment
The School of Architecture and Built Environment, or SoABE, boasts 21st century teaching and learning spaces – design studios, digital facilities, specialist labs and immersive lecture theatres – all set against a spectacular heritage backdrop.
RLB held a dual role over the course of the project, acting as both external and client-side project manager. Deeply embedded in the university’s team, our team understood the project inside and out, working closely with academic departments, facilities management teams, contractors and the community.
JOIN OUR
PROFESSIONAL NETWORK
© Rider Levett Bucknall Limited 2026