Industrial Strategy update points to pipeline growth across housing, energy and specialist sectors

For BCIS chief economist, Dr David Crosthwaite, the government’s latest Industrial Strategy quarterly update⁽¹⁾ offers a clear signal of where future construction workloads are likely to emerge, with planning reform, energy investment and place-based growth all shaping the pipeline. 

While the strategy focuses on high-growth sectors such as advanced manufacturing, clean energy and digital technologies, it highlights several areas where policy and funding are converging to bring forward development activity. 

Earlier measures set out in the Industrial Strategy, including proposals to reduce electricity costs for energy-intensive industries and support foundational sectors such as construction, point to a wider policy framework aimed at improving delivery conditions as well as stimulating demand. Alongside this, emerging initiatives such as the Strategic Sites Accelerator Programme are intended to bring forward developable land more quickly, helping to unlock projects that might otherwise be delayed. 

One of the most direct implications comes from planning reform. The Planning and Infrastructure Act, described as the most ambitious overhaul in a generation, is intended to remove barriers to delivery by streamlining approvals and accelerating progress towards the 1.5 million homes target. Progress towards that target has so far been uneven, however, with delivery not yet at the pace required to meet it. For contractors and consultants, the shift is less about immediate output and more about unlocking schemes that have previously stalled in the system. 

Alongside housing, energy infrastructure stands out as a major driver of future work. The selection of Wylfa as the UK’s first Small Modular Reactor site, backed by more than £2.5bn in funding and expected to support 3,000 construction jobs, points to sustained demand in complex, high-value projects. This is reinforced by continued investment in offshore wind, grid access reforms and funding for energy transition zones, all of which require significant enabling works and specialist delivery capability. 

The update also highlights a growing pipeline of commercial and specialist developments. Announced projects include a new Canary Wharf tower for JP Morgan, the expansion of life sciences facilities in the Midlands and additional data centre capacity. These types of schemes typically carry higher specification requirements and may place pressure on particular parts of the supply chain, including MEP services and technical fit-out. 

Place-based investment is another consistent theme. Growth corridors such as Oxford to Cambridge, alongside regional investment zones and mayoral funding programmes, are positioned as vehicles for combining housing, infrastructure and commercial development. For the industry, this suggests that future workloads could be increasingly concentrated in defined geographic clusters. 

This concentration of activity also has implications for delivery. Where multiple large schemes come forward in the same locations, there is potential for localised labour supply pressures to emerge. Without early and coordinated resourcing, this could lead to pinch points in key trades and specialist roles. In many cases, the constraint is not simply labour availability, but access to the specialist skills and capability required for complex projects. 

More broadly, the combination of concentrated demand and uneven supply conditions may lead to greater variation in tender pricing between sectors and regions. High-demand areas such as energy infrastructure, data centres and specialist commercial schemes may experience different pricing pressures to weaker parts of the market. 

Planning intervention in large schemes is also becoming more visible. Decisions to approve developments such as Marlow Film Studios and the £6.2bn Universal Studios project in Bedfordshire indicate a willingness to use central powers to accelerate delivery of strategically important projects. This approach may reduce uncertainty for major developments, although it also reinforces the importance of policy alignment in bringing schemes forward. 

Across the update, there is also a strong emphasis on industrial and manufacturing investment, including automotive, defence and advanced technologies. While not all of this translates directly into large-scale construction output, it signals continued demand for factories, logistics space and supporting infrastructure. Measures to strengthen domestic supply chains and improve access to inputs also point to a longer-term focus on resilience, which may influence how projects are specified and delivered. 

Taken together, the update does not point to an immediate uplift in activity, but it does provide a clearer picture of where future demand is likely to be concentrated. Housing delivery, energy infrastructure, specialist commercial schemes and regionally targeted growth programmes all feature prominently. 

For construction, the key takeaway is that the pipeline is being shaped less by short-term market conditions and more by coordinated policy, investment and planning reform. However, the conversion of this pipeline into projects on site will depend on how effectively planning, procurement and supply chain capacity align. 

In this context, procurement timing and early engagement with the supply chain will become increasingly important in managing both cost and programme risk. It also reinforces the need to keep cost benchmarks up to date, particularly where market conditions are changing quickly. 

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^{(1) Industrial Strategy quarterly update: October to December 2025  - here}