Supply chain risks leaving UK construction firms exposed

UK construction companies must firmly focus on risk transfer mechanisms, such as insurance and advisory firm retainment, due to supply chain disruptions caused by tariffs, protectionism and labour shortages hitting the sector.

This is according to a new report – entitled Trade tensions and the construction sector: Navigating supply chain disruption – on supply chain stability from insurer QBE, which was published on 21 July 2025.

This research identified steel, copper, aluminium and timber as particularly high risk commodities, with UK dependence on US and Canadian timber and Chinese aluminium representing a substantial supply chain bottleneck.

QBE’s analysis further suggested that supply chain stability for UK construction firms would additionally be impacted by government mandated sustainability initiatives.

Despite these potential pinch points, the report noted that supply chain volatility could actually benefit UK firms in some scenarios – for example, where Chinese steel surpluses could be directed to the UK in the event of escalating US tariffs.

Individual exposure

QBE said that “each company’s exposure is shaped by its specific supply chain structure, geographic footprint and relationships with key stakeholders, including investors, regulators and local authorities”.

It added that “risk transfer mechanisms, such as insurance, alongside partnerships with specialised advisory firms, offer additional operational resilience”.

Neil Fleming, UK construction and engineering portfolio manager at QBE, said: “The confluence of global supply chain disruptions, rising material costs, labour shortages and sustainability goals present a complex risk landscape for the UK construction sector.

“This situation is compounded for British building contractors and property developers due to the UK’s commitment to net zero carbon emissions by 2050 and pressure to build with more environmentally sustainable materials.

“Proactively engaging with insurers and leveraging specialist solutions will help construction firms manage project continuity and financial stability in the face of some uncertainty this year and into [2026].”