By Phil Hodgson (Director)
Building Services Design Market Update: A Market Finding Its Balance
The building services design market continues to present a mixed picture. Whilst many consultancies are finding conditions more challenging than they were 12–18 months ago, there are also clear signs of resilience and optimism across the sector.
Across the wider UK construction industry, confidence remains cautious. Many of the businesses we speak with have healthy bid pipelines, but converting opportunities into live projects is taking longer than expected. Planning delays, funding approvals and slower client decision-making are all contributing to projects moving at a slower pace.
At the same time, competition for winning new work has intensified. More consultancies are pursuing the same opportunities, creating increased fee competition and putting pressure on margins. As a result, businesses are becoming increasingly selective about the projects they pursue, ensuring they protect both profitability and long-term relationships.
Recruitment remains selective—but demand for quality hasn't changed
Although permanent hiring has become more measured, demand for experienced building services engineers remains exceptionally strong.
One trend we've seen over recent months is the increased use of contract and interim resource. Many consultancies are choosing to bring in flexible contractors to manage short-term peaks in workload while they wait for larger, more consistent project pipelines to commence. It allows businesses to remain agile without overcommitting during a period of uncertainty.
Importantly, genuinely high-quality candidates remain extremely difficult to find. When we identify experienced Mechanical or Electrical Engineers with strong project delivery experience, our clients are moving quickly. The competition for the very best people remains intense, and we're regularly seeing multiple businesses competing to engage the same individuals.
Not all sectors are moving at the same pace
Whilst some traditional commercial markets have slowed, others continue to perform extremely well.
Data centres remain one of the standout sectors, with demand for experienced engineers showing little sign of slowing. Clients operating within mission-critical environments continue to invest heavily, creating opportunities across design, project delivery and leadership positions.
As always, businesses with exposure to multiple sectors are generally proving to be the most resilient.
A changing workforce
The market has inevitably seen some restructuring during the first half of the year.
Where redundancies have occurred, they have generally been strategic rather than widespread, with consultancies reviewing business structures, reducing underperforming teams and, in some cases, rationalising departments that experienced rapid growth over recent years. We have also seen businesses reviewing roles that rely on visa sponsorship where future thresholds have increased and workloads are less certain.
The recent administration of Deerns also serves as a reminder that even respected consultancies are not immune to challenging market conditions. However, this should be viewed within the context of a market that is rebalancing rather than one in decline.
Reasons for optimism
Despite the current challenges, there are encouraging signs for the months ahead.
Inflation continues to ease, helping improve the wider economic outlook, and there is growing hope that a more stable political environment in the UK will provide businesses and investors with greater confidence to commit to delayed projects.
Many of the schemes currently sitting in the pipeline appear to be postponed rather than cancelled. As those projects begin to move, we expect recruitment activity to strengthen during the second half of the year.
Looking ahead
The building services design market is undoubtedly more competitive than it was a year ago, but it remains fundamentally strong.
Businesses are adapting by using flexible resource, being more selective with recruitment and focusing on sustainable growth rather than rapid expansion. Meanwhile, demand for exceptional engineering talent has not diminished. High-quality candidates remain one of the most valuable assets in the market, and the competition to secure them is as strong as ever.
As confidence returns and projects begin to unlock, we expect consultancies that have retained their key people, protected their margins and continued investing in quality talent to be in the strongest position for the remainder of 2026.
If you are a client or a candidate who is looking to hire or make your next career move, please do feel free to reach out and get in contact with me at phil@marchwooduk.com or call me on 07441343352.
You can also browse current vacancies by clicking on this link https://www.marchwooduk.com/vacancies