Steel exemption ends, construction downturn eases and the grid becomes the gate for UK data centres
26 October 2026. A review of UK infrastructure and materials covering September and October 2026 to date, as the steel import transition closes, the construction PMI improves but stays in contraction, Ofgem weighs a commitment fee for data centre grid connections, and the GRP and composites industry presses its skills and standards agenda.
September and October brought a sharper focus on what physically constrains UK infrastructure delivery. The steel import regime lost its transitional cushion at the end of September, so contracts signed before the March cut-off now face the same 50 per cent out-of-quota duty as everything else. Construction output is still contracting, though more slowly than in the summer. And in the energy system, the queue for grid connections has become the clearest filter on which large projects, data centres above all, will actually be built and when. Money is largely committed across rail, water and defence. Steel, power and confidence are what decide the pace, and the composites industry is using the moment to make its own case for a bigger role.
Steel and materials
The most important date in the period was 30 September, when the transitional exemption for steel imported under contracts signed before 14 March expired. According to Exporter Services in its 25 September trade roundup, quotas then reset on 1 October for the new quarterly period, but a shipment arriving outside its country quota now pays the 50 per cent safeguard duty regardless of when the underlying contract was agreed. Quotas are allocated on a first-come, first-served basis, and some categories had already run out before the exemption lapsed. Published descriptions of the cut differ, with the final figure usually quoted as 51 per cent and some trade commentary still citing the provisional 60 per cent, so buyers should check current balances against the GOV.UK measure rather than rely on a summary.
On freight, Drewry’s World Container Index fell 2 per cent to $4,351 per 40ft container in the week to 8 October. Drewry attributed the dip to lower Transpacific and Asia to Europe rates as demand eased during China’s Golden Week, with Shanghai to Rotterdam at $3,337 and Shanghai to Genoa flat at $3,696. It expects rates to hold broadly stable the following week.
On resins, the CompositesWorld price change report lists no new UK or European increase this period. We found no new BCIS steel reading and no genuinely new standards moves in September or October, so we report none. For composites, the effect is that GRP is increasingly being specified as an alternative to steel, with Engineered Composites reporting that initial acquisition costs are now broadly comparable in many applications, before whole-life savings are counted.
Construction
The S&P Global UK Construction PMI rose to 46.1 in September, according to coverage by PBC Today published on 7 October. Activity is still contracting but at its slowest rate since January. Commercial work was the firmest at 48.5, its mildest decline since May 2025, while residential construction stood at 40.7 as housebuilding remained weak.
The underlying detail was less encouraging. New orders fell at their fastest pace in three months, as firms cited longer sales cycles and clients delaying decisions on major projects. Employment has now fallen every month since January 2025, with September the sharpest drop in five months, and business optimism fell to its lowest since May. Input price inflation eased for a fourth consecutive month, though S&P Global’s Tim Moore described the output downturn as the least marked since January rather than as a recovery. The October reading is due in early November.
Rail
Network Rail and contractor Kier are to begin a £115 million upgrade at Manchester Airport station this winter, running to 2028. The scheme extends Platforms 1, 2 and 3, reworks track layouts on the approach and modernises signalling, according to RailBusinessDaily on 7 October. On HS2, the central section of the roughly 1.4km Wendover green tunnel in Buckinghamshire is complete, with earth now being placed over finished sections.
Elsewhere, the Sonning Cutting stabilisation programme continues towards 2030, with the Warren Road bridge in Woodley closed until spring 2028 and the Butts Hill Road bridge closing to vehicles from 9 November until mid-January 2027. Campaigners are also pressing for the reopening of the Poulton to Fleetwood line, with a meeting convened by Blackpool North and Fleetwood MP Lorraine Beavers. We could not verify the results of the National Rail Awards held in September, so we do not report them here.
Water and utilities
The consultation on Ofwat’s draft Cost Change Process decisions closed at 5pm on 24 September, with final determinations expected in December. The draft allowed £3.39 billion of the £3.533 billion Ofwat judged eligible, from £4.3 billion requested by 13 companies, with funding tied to Price Control Deliverables and subject to clawback if outcomes are not delivered. The draft includes water infrastructure for a data centre in East Manchester, a small but telling sign of how digital demand is reaching the water sector. We found no other verified water or utilities developments for September or October.
Renewables
The main renewables development remains Allocation Round 8. Energy UK reports that NESO is expected to notify applicants between November and February, with results for all technologies announced together, unlike AR7 when offshore wind was announced first. Only projects holding advanced Gate 2 grid connections could bid, and Administrative Strike Prices are carried over from AR7. Energy UK says offshore wind alone could unlock £20 billion to £30 billion of private investment. We did not find verified new generation, planning or policy figures for September or October, so we have nothing further to report this month.
Defence
The MoD awarded TKMS ATLAS UK the Next Generation Countermeasure contract for Royal Navy submarine torpedo defence, with Babcock supplying launcher technology and platform integration, as reported by Naval News on 17 September. The value was not disclosed. Under the Underwater Defensive Aids Suite programme the system will follow a spiral development approach.
October coverage from the UK Defence Journal pointed to future spend more than present awards. A replacement for the SA80 rifle is estimated at up to £2 billion over 2029 to 2045, an outline business case for sealift is due this financial year, and the MoD says it will publish a single entry point for SME suppliers by the end of the calendar year. Reports also indicate Type 31 frigate costs are rising on labour and supply chain pressures, with the support deal being rethought. Babcock opened a skills centre on the Devonport waterfront.
Marine
We found no verified new marine or offshore wind port milestones for September or October. We will report firm progress on the offshore wind port schemes when it is announced.
Data centres
Grid access dominated data centre news. Ofgem’s consultation on connection reform closed on 17 September with a decision pending. It proposes a Data Centre Commitment Fee of £237,500 to £712,500 per MW, forfeitable if a project leaves the queue early, together with milestones such as evidence of a credible end user and procurement of long-lead equipment. Government material cited by Construction Magazine UK says around 140 data centre projects, about 50GW, are seeking transmission connections.
Savills puts UK live data centre capacity at 1,803MW, of which 1,637MW, about 91 per cent, is in London, with 242MW under construction. On the supply side, construction has started at Uxbridge Moor on substations to serve more than a dozen data centres with connection requests of about 1.8GW, with Murphy as principal contractor.
GRP and composites
Engineered Composites Ltd launched a Heavy-Duty GRP Range on 6 October, reported by Composites UK, aimed at markets where steel and concrete have traditionally dominated. It comprises vehicle-rated pultruded grating tested to EN 124 load classes B125 and C250, high-modulus structural profiles with a flexural modulus of 42 GPa, about 1.6 times the stiffness of a standard pultrusion, and machined crossarms for overhead power lines rated to 120 kV. The company says a single high-modulus member can replace a fabricated steel pair in some designs, and managing director Gavin Williams described the range as moving segments from GRP not quite being there to GRP being the better choice. The trend it points to is a wider move by specifiers to treat GRP as a like-for-like option where steel was once the default.
The Composites UK GRP Composites Working Group met at Filon Products on the theme of expanding GRP use, according to a Composites UK report on 1 October. Discussion centred on defence and low-cost drone applications, and on skills. Members identified skills shortages as the main barrier to growing capacity and entering new markets, with the shortfall estimated to cost the UK economy around £5 billion a year, and backed exploring a wider campaign to attract talent and raise awareness in sectors where composites are underused. Composites UK chief executive David Bailey said the industry needs to inspire the next generation to join.
Standards and policy moved in two places. On 8 October, the European Rebar Council and ACMA signed a memorandum of understanding at CAMX 2026 to promote glass fibre reinforced polymer rebar, including aligning Eurocode with ACI and AASHTO design rules, as reported by FRP Global Hub. On 2 October, Tech-Fab Europe backed a European Commission proposal to greenlist non-hazardous FRP composite waste, which would ease cross-border recycling and has the support of EuCIA.
Recycling and substitution stories also featured. CompositesWorld reported on 23 October that CRRC has completed production of a 110-metre recyclable wind turbine blade, using a debondable infusion resin that reportedly recovers over 95 per cent of resin and fibre. On 19 October it covered Oldroyd’s BasaBolt system, which uses basalt and glass fibre with an epoxy matrix as a steel replacement in tunnels, with a claimed service life above 120 years. On 12 October Aditya Birla Advanced Materials signed four memoranda to build recovery routes for epoxy composite waste, including wind blades. These are company claims and none has yet been tested on a UK project.
What to watch next month
The S&P Global construction PMI for October is due in early November and will show whether September’s improvement holds. The Composites UK Awards dinner takes place on 4 November, alongside Advanced Engineering at the NEC on 4 and 5 November. Composites UK and NPL hold an event on composites in extreme environments on 17 November, the RECOMP conference on composite waste follows on 25 November at the AMRC, and a Composites UK reception at the House of Commons is planned for 9 December. NESO’s AR8 notifications could begin from November, Ofwat’s final determinations follow in December, and Ofgem’s decision on data centre connection fees is awaited. On steel, the first full quarter without the transitional exemption will show how quickly quota balances are used and whether duty costs reach project prices.
Sources: PBC Today and S&P Global (construction PMI), Exporter Services, EUROMETAL, GOV.UK (steel trade measure), Drewry via MIDTRANS, CompositesWorld, Composites UK, FRP Global Hub, RailBusinessDaily, Water Magazine, Energy UK, Naval News, UK Defence Journal, Construction Magazine UK, Savills and Ofgem as cited there. Marine Industry News, British Marine, Solar Energy UK and pv magazine had nothing verified and relevant for the period. We could not access Rail Magazine’s National Rail Awards report.
Compiled by the Engineered Composites News Desk.