The Construction Products Association’s latest Autumn Forecasts reveal that construction output growth has been significantly revised down amid uncertainty over government tax rises in the forthcoming Autumn Budget. Overall output is now forecast to rise by just 1.1% in 2025 and 2.8% in 2026 – down from 1.9% and 3.7% previously.
Activity across the sector has slowed since spring, with private housing, infrastructure (particularly roads), and commercial offices all reporting weaker demand. Confidence among homebuyers and investors remains low as firms and households await clarity on tax increases and spending cuts expected on 26 November.
Private housing is forecast to grow by 2.0% in 2025 and 4.0% in 2026, half the rate previously predicted. Housebuilders continue to face affordability challenges in high-priced regions and rising site costs elsewhere. Private housing repair and improvement is expected to stay flat in 2025, with only modest growth of 2.0% in 2026, as homeowners remain cautious about large discretionary spending.
Infrastructure offers the brightest spot, with growth of 1.9% expected in 2025 and 4.4% in 2026, driven by investment in water, sewerage, and energy projects. However, cuts and delays to road and rail programmes continue to weigh on confidence.
Rebecca Larkin, CPA Head of Construction Research, said that uncertainty around tax rises has stalled investment and household spending, adding that “the effects of pre-Budget uncertainty are being felt now,” and the eventual impact of Budget measures “will heavily determine whether 2026 is a year of growth or contraction for the industry.”
Read the full CPA Autumn Forecasts report here👇