The Construction Products Association (CPA) has lowered its expectations for construction growth throughout the year
The newly adjusted CPA winter forecast expects a growth of 1.7% throughout the year, significantly lower than the 2.8% in the previous forecast.
According to the forecast reports, most key sectors are reporting slower activity.
Activity has been weak since last Spring
“Weak fundamentals and geopolitical developments” are cited as keeping growth low by keeping decision makers and investors risk-averse, prolonging the period of uncertainty.
Output is especially suffering in the private housing, private housing repairs, maintenance and improvement (rm&i), and commercial sectors.
Little growth is expected in private housing throughout the year, as trade-offs between buyer affordability and development viability grow, and costs continue to rise. Output growth is forecast at a measly 1.5% this year, down from last autumn’s 4.0%. Private housing rm&i is even forecast to contract by 1.0%.
CPA head of construction research, Rebecca Larkin, said: “We enter 2026 with little to suggest that the conditions that held back construction over the last 12 months are improving: slow economic growth, weak business and consumer confidence and risk aversion resulting in subdued activity in the major sectors of construction.
“With hopes of a recovery consistently dashed last year, firms in the construction supply chain are bracing themselves for another difficult year that is still laced with risks, challenges and uncertainty.
“However, there are two main primary questions remaining. Firstly, when will confidence improve enough to see homebuyers, homeowners and investors press ahead with large spending decisions and drive a pickup in house building, home improvements and large private sector projects. Secondly, will government introduce a much-needed policy to enable demand in a housing market and house building sector given that affordability remains a key constraint?
“Until then, the 1.7% growth that is forecast for construction is pinned on niche areas of activity such as commercial fit-out and refurbishment, infrastructure work on energy and water networks, as well as the effective delivery of public sector building programmes for schools, hospitals and prisons.”
Other organisations concur
Earlier this month, the Builders Merchants Federation (BMF) released their own industry forecast which had similar gloomy prospects for the year, but expected growth to rise in the second half of the year.
The BMF’s summer report predicted a growth of 2.5% in 2026, but this has dropped to 1.4%, as data points to continued stagnation.
John Newcomb, CEO of the BMF, said: “Initially, we saw a glimmer of growth in building material sales in the first six months of 2025, but the positive trend stalled and the anticipated turnaround for the third quarter of the year failed to materialise.
“Instead Q3 was heavily impacted by economic shocks, with a sharp contraction in August despite the hottest summer on record.
“This was compounded by housebuilders adopting a cautious approach ahead of the Autumn Budget, which ultimately fell short of delivering the stimulus required to reignite the housing market, as well as a fall in consumer confidence.
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