Market Update

By Rohan Coleman (Consultant)

Mid-2025 Market Update: A Market in Transition, But Trending Up

2025 is shaping up to feel a lot like that roller‑coaster ride of 2024. One month you’re up to the neck with design calculations and deadlines, the next you’re sitting around waiting for clarity on a big public‑sector pipeline.

Different clients really are poles apart - while some firms are waving goodbye to engineers, others are begging us to send more CVs their way. But here’s the thing: as summer swings into gear, I genuinely believe we’re about to hit full throttle again.

Why? A few factors have been conspiring to hold things back: inflation’s finally under control, but mortgage rates are still a touch higher than we’d like; the general election put government‑funded projects on pause; and, in sectors like healthcare and social housing, there’s talk of a cracking pipeline but not a single pound green‑lit yet.

Once ministers in Westminster start dropping real cash on net‑zero homes, retrofit grants, and building‑safety upgrades, I’m expecting a barnstorming second half to the year.

Already, engineering roles are outperforming the wider jobs market. The latest REC/KPMG Report on Jobs found that engineering was the only sector to see rising demand in April - a standout stat in a climate where many industries are still stuck in neutral.

The Big Themes Driving Demand

Green & Clean - Net‑Zero Retrofitting

First and foremost, the net-zero agenda is doing heavy lifting. Every building in the UK that wasn’t built in the last five years needs a deep energy‑makeover. That means heat pumps, mechanical ventilation with heat recovery, smart controls, and solar arrays. In May alone, over £630million was allocated for retrofit work on schools, care homes and community buildings. The engineers who can spec, model and commission these low‑carbon systems are already the hottest commodity. If you’re a mechanical or electrical engineer who’s mastered energy‑modelling software you’re in a very strong position.

Digital & BIM - The New Baseline

The government’s ISO 19650 framework is embedding BIM workflows across public procurement, and client expectations have followed suit. Now it’s rare to see a project without Revit. The firms that can clash‑detect, coordinate pipework and ducting in 3D, then export to Navisworks for site teams, are winning bids. Engineers who can operate in a model-based environment - or better yet, integrate analytics and building performance data - are climbing the priority list fast.

Safety First - Post‑Grenfell Compliance

Whether you’re working on an 18 m tower or a three‑storey retrofit, the Building Safety Act means designers are now legally defined as “duty holders,” and competence frameworks are being enforced. There’s growing demand for engineers with a working knowledge of BSA compliance, fire safety integration, and full-life cycle design documentation.

What That Means For the Jobs Market

Despite the economic caution, hiring hasn’t stalled - it’s just become more selective. Engineering vacancies have ticked up in early 2025, even as job ads elsewhere slowed. According to CIBSE data, 82% of firms in construction and property plan to hire this year, many targeting new retro fit and net-zero projects. But almost 90% still report a shortage of qualified talent - especially in the early-to-mid career bracket.

Regionally, London still leads on headcount, but other hubs are thriving too. The West Midlands is buzzing with data centre and logistics work; the Northwest and London are benefitting from life sciences and manufacturing; and Scotland continues to see healthy demand in education and renewable projects. Outside the capital, lower cost of living and rising investment are making places like Manchester, Birmingham and Glasgow hotbeds of design activity.

In terms of salary and benefits, salary growth has cooled slightly from the post-pandemic highs - average raises now hover around 2-3%. Typical pay ranges are £30-40k for junior engineers, £40-50k for mid-level, and £50-60k+ for more senior roles in London (with regional roles tracking ~10% below). But the real battlefield now is benefits.

Flexible working, training budgets, chartership support and interesting project work are driving decisions more than headline pay. For many engineers, a couple of extra days at home or better opportunities for professional development trumps a small salary bump. Employers are responding, often tailoring packages to career growth, lifestyle and remote balance -especially for that in-demand mid-tier.

Looking Ahead

Looking ahead to the second half of 2025, the market looks set to firm up. Data centre builds, public retrofit work and government-backed decarbonisation are all on the rise. BESA forecasts a £21 billion M&E market in 2026, and the Climate Change Committee suggests up to 700,000 new green jobs could be created by 2030. Many will require exactly the skills that building services engineers bring to the table.

The message? For engineers and employers alike, now’s the time to lean into sustainability, digital design and compliance. The market may not be red-hot - but for those with the right skills and strategy, the second half of 2025 looks quietly promising and if you’re considering a move, now’s the time to start conversations.

Should you need help navigating the rush, you know where to find us. Our team is here to advise clients on competitive packages and to guide engineers through career-defining moves.

Let’s make the next six months count.

If you want to learn more about Marchwood or how we can help you, visit this link

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Or you can contact me on rohan@marchwooduk.com | 07441 346 604