The Construction Products Association (CPA) expects the industry’s output to fall this year as the impacts of the conflict in the Middle East hit activity.
In what it has described as a ‘sharp, unprecedented downward revision’, the CPA’s Spring Forecast says construction output is now expected to fall by 2.5% in 2026.
The CPA’s Winter Forecast, published at the end of January, had said construction output was expected to rise by 1.7% this year.
Output is still expected to rise by 1.2% in 2027. However, risks are ‘heavily on the downside’, with the potential impacts of the Middle East conflict on the UK economy and construction industry expected to hit the sector’s activity over the next 12 to 18 months.
It is ‘increasingly likely’ that the second half of this year will see both a drop in construction demand and sharp cost increases, with double-digit construction product price inflation, especially in oil-based products and energy-intensive products.
The CPA’s head of construction research, Rebecca Larkin, said: ‘At the start of this year, there was a degree of cautious optimism over the outlook for construction activity in 2026 and 2027 across most sectors. However, this has been replaced by stark concerns over global factors and oil and industrial energy cost rises, leading to a spike in inflation.’
