INSIGHTS
Construction Market Intelligence
UK Edition
Q3 2025
Yorkshire & Humber
There is significant development and investment happening across both Leeds and Sheffield.
Leeds is seeing major construction activity with a strong development pipeline, especially in the residential sector. City centre developments are increasing in Sheffield, where activity overall is mostly public-sector dominated, with a focus on decarbonisation and estate rationalisation.
The government’s focus on housebuilding targets, net zero and investment in the healthcare sector is likely to have a positive impact on market activity in the region despite infrastructure challenges and rising costs. Increased sustainability requirements, the Building Safety Act and power supply issues, however, all pose longer-term risks to project starts across the region.
MARKET CONDITIONS & PIPELINE
Project starts and improving viability underpin market’s strong growth
Sheffield and Leeds remain strong in terms of growth and the level of new build and refurbishment projects starting on site.
The overall market, however, is cautious around new large-scale schemes with project viability still proving to be a problem, although we are seeing this gap closing which will aid further development.
Building Safety Regulator applications are still causing bottlenecks, with many projects becoming significantly delayed.
Estate rationalisation and decarbonisation remain a focus for all public sector clients who are looking to optimise their estates as opposed to expanding them.
Over the past few years, contractors have only been willing to negotiate tenders or price works on a two-stage basis. We are now seeing a move in attitude on smaller schemes with contractors now willing to tender for projects, dependent on the nature of the project.
The Tier 1 and Tier 2 contractor market remains busy, though contractor selection remains problematic with some order books focusing on their existing clients.
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: UNITED KINGDOM
▲ 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: YORKSHIRE & HUMBER
▲ 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 are forecast to rise in line with general inflation, with prices increasing steadily from current levels but not drastically as in previous years.
▉ RLB Yorkshire & Humber
▉ BCIS (National) TPI ▉ BCIS (GBCI)
▉ Competitors' range (High & Low)
INPUT COSTS
- Prices of materials and labour are expected to rise in line with industry forecasts and there are no known dominant factors that are impacting tender prices at this moment in time.
SECTOR FOCUS
Data Centres
A number of potential new data centre developments have been identified across Yorkshire & Humber which will aid economic growth and other sectors within the region.
Logistics & Manufacturing
Demand for distribution units remains stable, led by end-users. Speculative developments are limited currently with developers focusing on refurbishment and repurposing of empty units in the region. Power supply issues remain the biggest risk to the sector’s growth.
Public & Civic
Local authorities remain keen to invest in redevelopment projects in towns and cities although project viability remains a problem.
Residential
Affordable homes and public sector housing remains a key focus for local authorities. Developers remain cautious around purpose-built student accommodation, build-to-rent and large private schemes due to hold-ups in the planning process and Building Safety Regulator applications.
Goole Hub
RLB is supporting East Riding of Yorkshire Council with project management, cost management and principal designer services for the redevelopment of East Riding Leisure Goole.
The project – part refurbishment and part new-build – will transform the leisure centre into the Goole Hub, a multi-service centre providing a range of services for the local community.
The new building’s facilities will include an improved gym, a learner pool, a state-of-the-art six-lane bowling alley, and the town’s library.
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