The Construction Products Association (CPA) submitted a representation to the Chancellor of the Exchequer before the 26 November Autumn Budget on behalf of the UK’s manufacturers and suppliers of construction products and materials, recommending a number of key actions that the government could undertake.
Critically, the CPA makes clear that a positive government stimulus is urgently required to enable house building demand in the UK’s largest construction sector.
That argument was reinforced this week when the CPA published its latest Construction Forecasts, in which house building is forecast to remain flat in 2025 and rise by 4% at best in 2026, with risks heavily weighted to the downside due to the potential impacts of the Autumn Budget tax rises on homebuyer confidence and affordability, economic growth and unemployment. This follows on from falls of 14% in new house building completions and 39% in new house building starts between 2022 and 2024.
The CPA is now forecasting that house building will not even return to 2022 levels until at least 2028 and will not return to pre-pandemic levels until 2029/30. Furthermore, the government is likely to miss its own targets by 30%, even before the potential negative impacts of the Autumn Budget on 26 November.
The pickup in construction activity that had been expected at the start of the year has not materialised. A high degree of uncertainty and affordability continues to hold back home purchases, which negatively impacted on home improvement spending as well. The risks and uncertainties around the impact of impending tax rises in the Autumn Budget in November have only intensified. This is likely to leave households, businesses and investors holding off spending and investment decisions for longer, which limits demand in the largest construction sectors.
Professor Noble Francis, CPA Economics Director, said: “Construction has already lost more than 11,000 construction firms since the start of 2023, and given the current low levels of house building and home improvement, we expect construction insolvencies to accelerate in 2026. A new positive, time-limited stimulus for house building demand is urgently needed from the government – particularly for first-time buyers – before insolvencies further damage skills and capacity throughout the construction supply chain, including architects, builders' merchants and product manufacturers, as well as house builders and specialist contractors. Without these firms and their critical skills and capacity, any sustained recovery in house building will be more difficult, slower, and more expensive over the course of this parliament.”
Adam Turk, CEO of Siderise Group and Chair of the CPA added: “Our industry has a responsibility to flag the likelihood of worsening job losses, skills shortages and manufacturing capacity unless this government acts to stimulate growth in this essential sector. This is not scaremongering but rather an honest reflection of what is happening on the ground.
“We have already seen house building collapse in London but are encouraged that government has recognised the crisis facing industry there and intervened to help. That help is needed across the country now, with a particular focus on supporting new home buyers who are struggling with affordability. Industry stands ready to build and support the government’s aspirations, with significant investments in people and capacity already committed by hopeful businesses since the 2024 election, but much of this could be in vain without a much-needed boost to the market.”
