Tradespeople and the construction industry were prominent in the headlines in 2025 – with housing targets, tariffs and rising costs, and sluggish productivity defining the year for the industry.
Looking ahead to 2026, what challenges and opportunities are ahead for tradespeople?
1. The missing middle workforce
The skills shortage did not significantly improve in 2025 – but it’s changing. Many workers have had to up skill to replace the older workers that never returned after the pandemic.
Meanwhile, the government continues to invest heavily in apprenticeships and training for young people to start a career in construction.
What we could see in 2026 is the mid-level workforce starting to shrink – with competition for this kind of worker becoming more fierce.
This could be particularly true for small business owners trying to keep their skilled workers from being poached by bigger firms. Especially when you consider crucial construction jobs, like large scale housebuilding, are usually done by these larger firms – with only nine per cent of new homes being built by smaller firms in 2025.
All of this stresses the importance of retaining the talent you have in your business.
2. The price vs cost paradox
The construction industry experienced the volatility of the global economy in 2025. With inflation and tariffs significantly affecting material costs, leaving many businesses needing to constantly adjust their prices.
But there’s a growing paradox where firms are having to raise their prices, consumers are needing to pay more, but few people are seeing a profit. Many construction jobs, particularly renovations, aren’t increasing property value like they would in the past.
This is particularly an issue with home renovations, as house prices aren’t growing inline with inflation. Homeowners who are looking to bump the value of their property by having a loft extension, for example, wouldn’t see the value of their property increase like they did in the past.
In previous years where house prices might rise 10 per cent in a year, the increase in value of the property would effectively pay for the extension. That buffer is gone in 2025 and isn’t likely to return in 2026.
This makes pricing a top priority for tradespeople in 2026. The firms that find the balance between covering your costs while providing value to your customers could be the most successful in 2026.
3. The AI adoption boom
The construction industry has had a reputation for being quite analog, relying on relatively old school processes in comparison to most other industries. But tech innovations are finding their way into more worksites and many are predicting a boom in the industry.
The current global value of AI technology in construction is around £4 billion. But by 2030, some predict the industry will be worth upwards of £20 billion.
Major firms are already using advanced technologies in their projects. Spot, a robotic dog-like surveillance tool, has been used on HS2 projects. And while they’re not currently available in the UK, autonomous housebuilding truck Hadrian X is revolutionising construction.
And software like Autodesk Construction Cloud offers real-time productivity data that helps you track the progress of your projects.
So far, AI adoption has been slower for smaller firms, mainly due to the cost of this new technology. But in 2026, there could be more accessible versions of these tools becoming more widely available.
4. The renovation and retrofit revolution
Throughout 2025, repair, maintenance and improvement (RMI) jobs were one of the most stable sectors – and there’s a few different reasons why they’ll continue to be an important job in 2026.
Many homeowners are opting for smaller upgrades to their properties rather than larger extensions. This is often due to higher costs associated with bigger renovations – as well as local councils, housing associations, and private landlords spending record amounts on repairs in 2025. This could also be due to stricter living standards rules like Awaabs law.
Additionally, the amount of homeowners looking to green energy solutions like installing solar panels and heat pumps has been increasing each year, experiencing a big spike in 2025.
RMI will continue to be a staple of tradespeople’s workload in 2026. With an ever-growing focus on energy efficiency upgrades.
5. The green skills gap
Homeowners looking for more cost-effective sustainable energy, as well as upcoming minimum energy efficiency targets for private landlords, means more people are going green.
But these green upgrades need skilled retrofitters, preferably with a PAS 2035 qualification. This demand for retrofitters currently outweighs the number of qualified workers.
The UK Green Building Council estimates that meeting the current climate goals would require a workforce of 500,000, meaning the demand looks set to grow further.
So in 2026, there could be more of a shift in tradespeople upskilling to retrofitters to capitalise on this demand for work.
Final thoughts: how to approach 2026
The industry is moving toward high-efficiency, green-focused projects where precision matters more than volume.
- prepare for work trends to change – large-scale extensions are becoming a harder sell for homeowners. Be prepared for more consumers that are looking for smaller renovation jobs
- protect your inner circle – with the “missing middle” workforce shrinking, one of your biggest risks is losing your most reliable lead tradespeople to larger firms
- update your pricing strategy – the “price vs cost paradox” means you can’t rely on old day rates. Inflation and shifting property values require a more surgical approach to quoting
- adopt tech to save time – you don’t need a robotic dog, but you should try to find ways that new technology can save you valuable time
- consider getting green certified – if it fits in with your profession, look for ways you could specialise in green technology as the industry looks set to grow further in 2026
More useful guides for small business owners
- What is the CIS?
- What is a CSCS card?
- How to write a late payment letter
- Insurance for construction businesses
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