The Construction Products Association (CPA) has downgraded its 2026 UK construction output growth forecast from 2.8% to 1.7%.
Significantly, private housing output is forecast to grow by only 1.5% in 2026, revised down from a forecast of 4.0% last autumn. The revision is published in the CPA’s winter forecasts.
Firms operating across the construction supply chain have all reported that the slowdown in activity in key sectors has persisted since spring 2025.
“Weak fundamentals and geopolitical developments are expected to keep decision-makers risk-averse and lengthen the period of uncertainty that is holding back output growth in the private housing, private housing repairs, maintenance and improvement (RM&I)) and commercial sectors,” the CPA states.
For housebuilders, the CPA says there is an increasing trade-off between buyer affordability and development viability. In areas where demand has been sustained, properties are affordable, but site viability has been affected by a growing list of additional costs imposed by the Government, especially for smaller house builders.
“In areas where site viability has been maintained due to higher house prices, demand and affordability remain the key constraints. An increase in current house building volumes would require a sharp rise in demand during the key spring selling season for the major house builders, and at this stage, this appears unlikely in the absence of demand-side stimulus.”
The CPA says the outlook in private housing RM&I is heavily dependent on when homeowners who have the finance available feel confident enough to spend on home improvements. Overall, the forecast for private housing RM&I output has been revised down to a contraction of 1.0% in 2026, marking a second year of decline.
In infrastructure, the third-largest construction sector, output is forecast to rise by 3.9% in 2026, unchanged from the Autumn 2025 forecast publication.
CPA head of construction research, Rebecca Larkin said he 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.
