Construction businesses are continuing to expand workloads despite concerns over rising costs, policy uncertainty and the wider economic outlook, according to new research from consultancy Pick Everard.

Its latest Market Intelligence Report, based on a survey of 100 contractors, developers, clients, consultants and other industry professionals, found that 52% of respondents have seen workloads increase over the past year, while a further 21% reported activity levels had remained stable.

The findings suggest that nearly three-quarters of organisations have either maintained or grown their order books over the last 12 months, despite challenging market conditions.

However, confidence in the market remains fragile, with just 1% of respondents strongly believing the government understands the needs of the construction sector, while 59% said they were either “not very confident” or “not confident at all”.

William Phillips, divisional director of cost management at Pick Everard, said the report highlighted a significant gap between sentiment and performance.

“The most striking finding from this year's survey is the contrast between how the industry feels and what it's actually doing. While ‘concerned’ was the dominant emotional response when we asked people how they felt about the state of the industry, more than half of respondents report being busier than they were this time last year.

“That tells us the sector is proving remarkably resilient and firms aren't standing around waiting for conditions to improve. They’re adapting, evolving and finding ways to deliver in a challenging environment.”

Cost pressures remain a major concern across the industry, with 83% of respondents expecting tender prices to continue rising over the next 12 months.

The report also identified encouraging signs around industry innovation and workforce capacity. More than half (56%) of respondents believe the sector is becoming more innovative.

The report also pointed to signs of progress in innovation and skills. More than half (56%) of those surveyed believe the industry is becoming more innovative, while concerns around skills shortages appear to have eased.

 However, Phillips cautioned against interpreting the reduction in skills concerns as evidence that the challenge has been solved. “There’s an important distinction between having enough people to deliver today’s workload and having enough capacity to deliver the pipeline of projects that lies ahead,” he said.

 “For those of us working in construction, there’s certainly no shortage of challenges to navigate. But what this report demonstrates is that the industry remains active, ambitious and determined to move forward.”

He added that workforce development, digital adoption and strong planning would be critical to helping firms navigate market volatility and take advantage of future growth opportunities.

Click here to read Pick Everard’s Market Intelligence report.