Confidence across the UK rail supply chain has fallen sharply, with nearly two-thirds of suppliers expecting the domestic market to contract over the next year, according to new research for the Railway Industry Association (RIA). Independent market research firm Savanta surveyed 125 senior rail figures between October and November, ahead of the Chancellor’s 26 November Budget.
The study found 64% of respondents now anticipate a shrinking UK rail market, up from 48% in the previous year’s survey. Only 12% expect growth, down from 26%, signalling a marked deterioration in sentiment about future work volumes.
Despite this, businesses are more upbeat about their own prospects than about the wider sector. Some 44% of respondents forecast growth for their own company over the next 12 months, broadly in line with last year’s 46%, while 23% expect their business to contract, down from 29%.
The weaker market outlook is already feeding through to employment decisions. Savanta’s polling shows 62% of rail firms are either freezing recruitment or cutting staff, and 34% have already made redundancies. In addition, 85% of respondents foresee a hiatus in rail work over the coming year, slightly higher than the 83% recorded in 2024.
Many companies indicated they are likely to respond by targeting more work overseas and slowing or halting hiring. This shift reflects concern about a tightening domestic pipeline and a need to follow opportunities in international markets to sustain order books and margins.
The findings highlight growing unease over the visibility of future investment in rail infrastructure, rolling stock and maintenance. With a large proportion of work dependent on government-backed programmes, any pause or delay in funding decisions can quickly affect suppliers, particularly small and medium-sized firms with limited financial buffers.
Industry leaders have long warned that stop–start investment patterns risk undermining delivery capability and eroding specialist skills. If the predicted contraction and work hiatus materialise, the sector faces a choice between a short-term slowdown and a more entrenched structural decline, depending on how quickly clarity is provided on future schemes.
RIA chief executive Darren Caplan described the results as “concerning findings for the railway industry”. He noted that rail passenger, freight and revenue levels are rising and that more capacity will be required, yet confidence in the UK rail market is falling and businesses are freezing recruitment or reducing headcount.
Caplan welcomed the fact that many firms still see scope for growth, often in overseas markets, but warned that the survey reinforces long-standing fears over “boom and bust” in rail infrastructure and rolling stock investment. He said the latest data shows more must be done to give suppliers the confidence to compete for work and invest in their teams for 2026, or risk losing talent and skills to other sectors and countries.
He pointed to major schemes such as the Transpennine Route Upgrade, East West Rail, Midlands Rail Hub and the Docklands Light Rail extension as evidence of a potentially positive long-term outlook. However, he stressed that short-term measures are needed to restore confidence now, including clearer information on rail enhancement projects in the government’s Infrastructure Pipeline and the publication of a rolling stock strategy and pipeline.
Caplan also called for clarity on innovative funding models, including private and third-party finance, and urged major rail clients to set out their short- and medium-term spending plans without delay. He argued that these steps would help address current market concerns and give suppliers greater certainty as the sector restructures and Great British Railways is established in the coming years.
