According to Emilecon, steel tariffs added around 6% to UK construction material costs in 2026, resetting the cost base for contractors across the sector in July. The July 2026 tariff package cut import quotas by 60% across 20 steel product categories and raised tariffs to 50%. Layered onto existing duties on aluminium and copper, the combined effect is an estimated 6% added to overall construction material costs, Emilecon reports.
Construction input prices are now rising at a 12,6% annualised rate, the fastest pace since 2022, per the analysis. On a project carrying a £2m steel package, a 6% uplift translates into an additional £120.000, a sum Emilecon notes rarely sits comfortably inside a project's contingency budget.
Despite the scale of the increase, Emilecon states that most contractors will absorb the cost rather than recover it, not because their contracts forbid recovery but because the clauses that permit it were either never selected at tender stage or the notification windows closed while the commercial team was occupied elsewhere. Under NEC4 Options A and B, the Contractor prices the work and carries the risk of cost movement, leaving fixed-price arrangements most exposed to the tariff-driven inflation.
The Construction Products Association forecasts a 2,5% contraction in UK construction output during 2026, according to the figures cited by Emilecon. Contractors are responding with defensive tendering, protecting margin, rejecting loosely defined procurement routes and pricing contingency openly rather than absorbing risk quietly. Emilecon frames recovering legitimate cost movement as part of that same commercial discipline rather than a separate argument.