Market Update: Early cost pressures are emerging – Here’s what we’re seeing first

At Vextrix, we’re starting to pick up clear signals of a market beginning to shift. Sitting across live projects, supply chains and tendering activity day-to-day, we’re seeing early signs of cost pressure returning, this time driven largely by escalating disruption across the Middle East.

Industry analysis points to rising energy prices, volatile shipping routes and disrupted logistics feeding into material production and transport costs. Brent crude has already moved from around $70 to over $100 a barrel, reflecting reduced oil and gas shipping capacity. Economists are also starting to highlight that UK construction is beginning to feel the effects of instability in energy markets and global supply chains.

That said, the most useful indicators aren’t coming from headlines; they’re coming through directly in live contractor and supplier conversations.

Real-Time Cost Movements We’re Tracking

Over the past week, multiple suppliers have issued early warnings or confirmed cost adjustments across key materials:

• Insulation/PIR: +7% to +17%
• Plasterboard: +6%
• Asphalt: +£11 to +£25 per tonne
• Aggregates: +£2 per tonne
• Concrete: +£4/m³
• Demolition: +10%
• Steel: +£60 per tonne
• Pipe products, waste management & paving: Increases expected

These movements are largely concentrated in areas most exposed to energy pricing and international logistics, particularly steel, cement, aluminium and imported components, which is typically where we see pressure emerge first.

But It’s Not All Negative – Some Suppliers Are Holding Prices (For Now)

It’s important to keep this in perspective.

Alongside the increases, several suppliers have confirmed they are absorbing cost pressures in the short term to maintain stability for clients. In practice, we’re seeing this driven by a few key factors:

• Protecting existing relationships – Many suppliers are prioritising continuity of work over passing on short-term volatility.
• Confidence still matters more than cost – There’s a clear awareness that sudden price jumps risk stalling decision-making.
• A reluctance to trigger wider inflation – The market is still cautious about creating momentum that accelerates cost escalation.
• Spreading risk while the picture becomes clearer – Some suppliers are effectively holding position until there’s more certainty in the market.

This kind of mixed response is typical at the early stage of a shift – not a crisis, but a market starting to move.

Why Clients Should Care: Behaviour Is Changing Before Prices Do

Even where headline costs haven’t shifted significantly yet, supply chain behaviour is already evolving:

• More risk allowances – Contractors are starting to build in additional buffers to protect against uncertainty.
• Shorter price holding periods – Quotes are being held for less time, reducing cost certainty during procurement.
• Increased qualifications – Tenders are carrying more conditions and caveats than we’ve seen in recent months.
• Reduced appetite for fixed pricing – There’s growing caution around committing to longer-term fixed positions.

If disruption in the Middle East continues, these behavioural shifts are likely to translate into more sustained cost inflation and potential programme pressure.

This is typically the point where proactive Quantity Surveying input makes the biggest difference.

Why Vextrix Is on the Pulse

Because we’re working daily across live tenders, cost plans and supplier negotiations and maintaining close relationships with principal contractors, we’re seeing these pressures emerge in real time, often ahead of formal indices or published data.

Right now, we’re helping clients to:

• Understand where their exposure sits – Not all packages are affected equally, and early clarity helps prioritise action.
• Sense check assumptions on live and upcoming schemes – Particularly where cost plans were set before recent market movement.
• Adjust procurement strategies where needed – Timing and packaging are becoming increasingly important.
• Stay ahead of supply chain behaviour – Managing risk isn’t just about price, it’s about how the market is responding.

This is where strong commercial intelligence adds real value and where acting early can make a measurable difference.

We Can Sense Check Your Project

We’re already supporting clients in reviewing schemes to understand where they stand and how best to navigate the coming months.

If you’d like a view on one of your projects, just let us know, we’re always happy to have a conversation.