CPA cuts 2026 construction output forecast to 4% fall and now expects 2027 decline

The Construction Products Association (CPA) has cut its outlook for UK construction again, with its Autumn forecast expecting total output to fall by 4.0% in 2026 and by a further 0.4% in 2027, according to a summary published by trade body FIS.

The figures are a downgrade from the Summer forecast. In July the CPA expected output to fall by 3.3% in 2026 before rising by 1.2% in 2027, so the association has moved from predicting a recovery next year to predicting a second year of decline.

FIS (Finishes and Interiors Sector) said the CPA attributed the weaker outlook to the lagged effects of the Middle East conflict on confidence among homebuyers, homeowners and private-sector clients, alongside rising construction and financing costs.

Rebecca Larkin, CPA Head of Construction Research, had already warned in July that "Construction activity so far this year is already lower than a year earlier".

The forecast

Forecast	2026	2027
Summer 2026 (CPA)	-3.3%	+1.2%
Autumn 2026 (CPA, via FIS)	-4.0%	-0.4%

The CPA's Construction Industry Forecasts cover 30 industry sectors, according to the association's publications page. It publishes forecasts quarterly, with full analysis in the summer edition and shorter updates in spring, autumn and winter. FIS said its members can read the full Autumn report as part of their membership.

According to FIS, the CPA said strong niches of activity remain in energy distribution, data centres, water infrastructure and commercial refurbishment and fit-out, as in previous forecasts.

The CPA also pointed to some upside, FIS reported: UK economic growth has surprised on the upside so far this year and inflation has not risen as much as expected. But it said downside risks continue to outweigh these, particularly given the re-emergence of Middle East conflict in September and rising oil and energy prices, which it expects to keep inflation higher for longer in both the wider economy and in construction.

The association added that its 2027 forecast assumes no unpredictable major global disruption, but noted that six such disruptions have occurred since 2020, so disruption appears to be the "new normal" and caution is advised.

Sector detail from the summer

The Summer forecast gave a sector-by-sector picture that the Autumn summary does not repeat. In July the CPA expected private housing output, the largest sector, to fall by 10.0% in 2026, with private housing repair, maintenance and improvement output down 8.0%. Infrastructure output was expected to rise by 3.2%, unchanged from the Spring forecast.

The CPA also flagged two cost pressures for the sector in its July release: the Building Safety Levy coming into force in October 2026, and the government's 50% import tariffs on imported steel, in force since 1 July 2026.

What the official data show

The Office for National Statistics (ONS) estimated that total construction output fell by 1.0% in the three months to August 2026, with private new housing the main negative contributor at a 3.2% fall.

Monthly output fell by 0.2% in August 2026, the fourth consecutive decrease in the monthly series, the ONS said. Within that, new work fell by 0.7% while repair and maintenance grew by 0.4%.

The interiors sector

FIS describes itself as the not-for-profit representative body for the £12bn finishes and interiors sector in the UK, with more than 600 members drawn from contractors, manufacturers and distributors. According to FIS, the sector employs 250,000 people and accounts for about 10% of all construction work.

Commercial refurbishment and fit-out is among the niches the CPA names as remaining strong, according to the FIS summary.

The full Autumn report is available to FIS members as part of their membership, FIS said.