Construction Industry Trends 2026

The construction industry is always evolving, and with new technology and sustainability initiatives, 2026 looks to be no different.  

As we head into the new year, it’s important that contractors and subcontractors remain abreast of emerging trends to ensure they stay competitive and compliant. At Contractwise, we’re experts in CIS compliance and work with construction businesses and individuals across the UK.  

Our role in construction has given us great insight, and in this article, we’ll take a closer look at what changes we may see in the coming year.

Read on for more information…

Construction industry trends 2026

Perhaps unsurprisingly, the biggest changes that could arise in 2026 are in relation to new technologies. Let’s take a closer look at what these could be, as well as other trends that are predicted to emerge:

More industrial construction

The industrial construction sector is forecasted to grow by 2% in 2026, according to professional services powerhouses PwC. This is fuelled by new factory pipelines that are emerging in the UK, particularly in the defence and manufacturing sectors. The government is determined to get more investment in critical infrastructure and manufacturing, and this growth is a sign of this. For contractors working in this space, it means more complex projects could be coming their way.

Managing these projects comes with a lot of challenges, but at Contractwise, we offer services to protect contractors and subcontractors to ensure they remain compliant, no matter what projects they are working on.  

A growth in new builds

The UK government continues to push for new homes as it aims to meet its manifesto targets. With this in mind, 2026 looks set to see a rise in new build projects. While repair and maintenance (R&M) work still remains crucial, new build projects look set to stabilise and grow more compared with 2025.

Construction AI

Artificial intelligence is transforming all aspects of life, and this looks set to be the case in construction, especially in construction planning and management. Tools like Buildots can create incredibly precise site maps and monitor progress automatically. This reduces errors and improves efficiency. AI can also forecast delays, advise on how to allocate resources more efficiently and even make sites safer.

Virtual construction growth

Virtual construction and digital technology are allowing engineers to produce fully digital versions of a project before any ground is broken. This helps people involved in the project to visualise what the final result should look like and keep everyone on the same page. Architects and contractors are able to simulate different phases of a project to anticipate any issues and improve collaboration across teams. This will also help keep on top of progress at every step of the project. However, integrating virtual construction requires precise coordination of staff and subcontractors and our team at Contractwise can help ensure your payroll runs smoothly to eliminate the risk of HMRC reclassification.  

Prefabrication and modular construction

Prefabrication and modular construction look set to expand further in 2026. They offer faster build times and reduced waste for projects. Prefabrication involves assembling building components off-site before being transported to the project for the final assembly. Modular construction involves creating entirely pre-made modules which can then be installed at the site.

These methods may require specialised management and scheduling for construction teams.

Rise of smart cities

Urban development is increasingly incorporating smart city principles into the construction industry. While this is more common in the US, it is a trend that could arrive in the UK in 2026. This helps to improve efficiency and sustainability in projects.

Smart buildings use the Internet of Things (IoT) systems to improve the quality of life of occupants, and this is becoming all the more mainstream. When involved in smart city projects, it is important that teams are properly coordinated and comply with a wide range of legislation.

Green building initiatives

There is a growing focus on making sure building projects are environmentally friendly and as sustainable as possible. This environmental responsibility looks set to shape construction practices in 2026. Green building techniques, energy-efficient designs and low-carbon materials are now both common in commercial and residential projects.

In many cases, sustainability is not an option, and it is becoming increasingly required by regulations and demanded by clients. 
Living building materials

The use of living building materials - materials that can self-repair and adapt to environmental changes - is still in its infancy, but could be set to grow in 2026. These materials offer resilience, sustainability and long-term efficiency, and are likely to become more commonplace in urban infrastructure projects in the future.

Drone technology in building

Drones are being increasingly used for site inspections and surveying projects, and in 2026, drone adoption is set to rise further. It is expected to be used to reduce on-site injuries and fatalities, improve accuracy and streamline entire projects.

Workplace wellbeing

These days, the construction industry has a huge emphasis on workforce wellbeing. In 2026, this focus is set to continue. Mental health support, ergonomic practices and generally safer work environments are all crucial to keeping productivity high and reducing the risk of any accidents.

What’s more, supporting your workforce extends to being compliant. Construction companies have to comply with all kinds of legislation to keep the workforce protected, so not only will following these rules help to keep people safe, but it also protects construction firms from any damaging legal action.  

In 2026, the construction industry will be defined by innovation and sustainability as well as technological integration. Whether this is managing industrial projects, new builds or smart city development, all contractors and subcontractors must make sure they stay compliant when adopting any new methods.

Here at Contractwise, we provide our clients with an end-to-end CIS service. This involves payroll audits that support compliance and ensure you are not on the receiving end of a damaging HMRC reclassification. For more information or to find out how we can help your business, simply get in touch with our expert team today.