27.01.2026
The UK infrastructure sector enters 2026 at a critical inflection point, shaped by the convergence of long-term public investment commitments, tightening fiscal constraints and deep-seated delivery challenges.
Following decades of underinvestment, infrastructure is now firmly positioned at the heart of the government’s economic growth agenda, with a once-in-a-generation pipeline spanning energy, transport, water, housing and social infrastructure.
Infrastructure is no longer a collection of discrete projects. It is a national system upgrade. Roads, rail, power networks, water systems, digital connectivity and public assets must all be renewed, expanded and made more resilient, often simultaneously and within the same regions. The result is sustained structural demand for engineering, project delivery, digital, commercial and operational capability across the full infrastructure lifecycle.
As with energy and defence, the binding constraint is no longer political intent or headline funding. It is delivery capacity. Acute shortages in skilled labour, constrained supply chains, planning delays and execution risk now represent the greatest threat to turning capital commitments into built assets.
As part of our Signal to Noise series, we cut through the headlines to examine the real market dynamics shaping UK infrastructure, focusing on investment drivers, workforce pressures and what this means for delivery in 2026 and beyond.
The state of the market
The UK government has committed at least £725bn of public funding to infrastructure over the next decade, supported by the publication of a 10-year Infrastructure Strategy and the launch of a national Infrastructure Pipeline covering 780 major projects. This marks a decisive shift toward long-term planning and visibility for the construction and engineering supply chain.
Infrastructure investment spans both economic and social assets. Energy accounts for the largest share of planned spend, followed by health, transport, water and wastewater, education and housing. Major programmes include grid reinforcement and clean energy transition, the New Hospital Programme, the School Rebuilding Programme, large-scale water investment under AMP8 and sustained transport upgrades rather than new megaprojects.
Unlike previous cycles, this is not a short-term stimulus. Demand is structurally underpinned by net zero targets, population growth, resilience requirements and the need to address ageing assets. However, delivery performance remains mixed. The UK continues to build infrastructure more slowly and at higher cost than peer nations, with planning complexity and workforce constraints acting as persistent brakes on progress.
Projections and trends for 2026
By 2026, UK infrastructure will be characterised by overlapping delivery programmes competing for the same finite pools of skilled labour and specialist suppliers.
Activity is expected to be strongest in:
Energy transition and regulated utilities, including electricity transmission, offshore wind, water and environmental programmes
Social infrastructure delivery, particularly hospitals, schools and justice estates
Transport upgrades focused on maintenance, electrification and regional connectivity rather than new high-speed lines
Digital and data-enabled infrastructure supporting productivity, asset management and resilience
Forecasts point to modest but improving growth. Infrastructure output is expected to rise from 2025 levels, with growth accelerating through 2026–27 as major programmes ramp up. However, this represents gradual acceleration rather than a sudden boom. Fiscal rules, regulatory scrutiny, planning delays and supply chain capacity will continue to cap the pace of delivery.
The political landscape in infrastructure
Infrastructure reform is central to the government’s economic strategy. The 10-year Infrastructure Strategy aims to provide stability, improve coordination across sectors and regions, and crowd in private capital alongside public funding.
Key policy themes include:
- A spatial approach to planning that considers infrastructure systems holistically rather than in isolation
- Greater use of long-term capital budgets to reduce stop-start investment cycles
- Reforms to planning and consenting for nationally significant infrastructure projects
- Institutional reform through bodies such as the National Infrastructure and Service Transformation Authority
While policy direction is clearer than in previous decades, execution risk remains high. Planning capacity within local authorities is stretched, regulatory processes remain complex and political sensitivity around major schemes continues to create uncertainty at project level.
Skills, workforce and supply chain pressures
Workforce availability is now the single most significant constraint on infrastructure delivery.
The sector requires over 250,000 additional workers by 2028, with the largest shortages in civil engineering, project management, digital engineering, utilities, power systems and skilled trades. Over a third of the workforce is aged over 50, while the pipeline of young entrants remains insufficient to replace anticipated retirements.
Productivity growth has stalled, in part due to historic volatility in investment that discouraged firms from investing in skills, technology and modern methods of construction. While recent reforms aim to stabilise funding, the legacy effects are still being felt.
Supply chains mirror these pressures. Many programmes rely on overlapping pools of contractors, designers and specialist SMEs. Material dependencies, particularly imported steel and timber, expose projects to price volatility and geopolitical risk. The shift toward low-carbon materials and digital delivery adds further complexity. In this environment, access to flexible, project-ready capability is often more valuable than permanent headcount growth.
Regional dynamics
Infrastructure investment is geographically uneven.
London continues to receive the highest public investment per capita, particularly in rail. Scotland and London also lead in private sector infrastructure activity. However, devolved funding settlements and city-region transport budgets are creating new regional growth hubs across the North, Midlands and devolved administrations.
These regional pipelines often overlap with energy, defence and industrial investment, intensifying local competition for skills and delivery capacity.ten overlap with defence, infrastructure and transport programmes, further intensifying local competition for skills.
Market structure and outlook
The infrastructure market combines a relatively small number of large asset owners and public bodies with a fragmented and capacity-constrained delivery ecosystem. Capital is increasingly visible and long-dated, but execution depends on the availability of skilled people and resilient supply chains.
The central risk is not demand volatility but delivery friction. Projects are more likely to be delayed by skills shortages, planning bottlenecks and coordination failures than by lack of funding.
The UK infrastructure market is entering a prolonged period of sustained demand rather than cyclical growth. For 2026, three realities dominate:
Investment intent is locked in, but delivery remains fragile
Skills scarcity will intensify before it improves
Organisations with flexible, integrated workforce strategies will outperform those reliant on traditional hiring models
Infrastructure delivery is now as much about people and systems as it is about capital. The organisations that succeed will be those that treat workforce capability, productivity and resilience as strategic assets—every bit as critical as funding approvals or project pipelines.
How Morson can help: Turning structural risk into competitive advantage
Where traditional recruitment models focus on filling roles, Morson helps organisations secure, shape and sustain capability across the full workforce lifecycle. Our strength lies not in a single service line, but in the power of an integrated ecosystem designed for long-term delivery.
We bring together:
- Deep sector expertise across energy, defence, infrastructure, digital and manufacturing
- One of the UK’s largest and most established technical talent networks
- Predictive workforce insight and scenario modelling through Morson Edge and Morson Praxis
- Early-career, reskilling and internal mobility pathways delivered via Morson Nexus
- Regulated, safety-critical workforce deployment through Morson Vital
- Scalable delivery models including MSP, RPO and Statement of Work
- Consulting capability that links people, process and productivity to measurable outcomes
Together, this allows organisations to move beyond reactive hiring and address the root causes of skills scarcity. Morson helps clients stabilise workforce supply, control cost exposure, protect institutional knowledge and deliver complex programmes with greater certainty.
In a low-growth, high-volatility economy, competitive advantage will belong to those who can deploy the right capability, in the right place, at the right time. Morson exists to make that possible.
Find out more about our experience in infrastructure here
