The construction industry’s recovery is expected to be much weaker than previously forecast, with the Construction Products Association cutting its growth forecast for 2027 to just 0.4%.
The downgrade follows an expected 4% contraction this year, with private housebuilding and home improvement work both forecast to shrink again in 2027.
The figures, reported by Roofing Today on 26 October, mark a further setback for an industry already facing a difficult year. In its summer outlook, the CPA had predicted a 3.3% fall in output in 2026, followed by growth of 1.2% next year.
According to Construction News’ report on the forecasts, the CPA expects the rise in oil and energy prices since September to keep inflation and borrowing costs higher for longer than it previously anticipated.
For housebuilders, that brings pressure from both sides: more expensive mortgages make homes harder to afford, while rising construction costs make developments harder to deliver profitably. The association expects those pressures to worsen over the next six to nine months.
Housebuilding remains one of the weakest parts of the market. Private housing output is now forecast to fall by 10% this year and a further 3% in 2027.
Work on existing homes offers little relief. Private housing repair, maintenance and improvement output is expected to decline by 8% in 2026, followed by another 2% fall next year.
Infrastructure is moving in the opposite direction, with growth forecast at 2.5% this year and 2.9% in 2027. Even here, however, the outlook has weakened: the CPA had expected infrastructure output to rise by 3.2% in 2026.
Existing long-term contracts for energy and water investment offer support further ahead. The CPA still expects total construction output to grow by 2.9% in 2028, with that work helping to offset potential falls in road and rail activity.
Road schemes face the risk of delays or cancellations as government spending is pulled towards other priorities. The association also warns that the HS2 reset could spread new contracts over more years to reduce annual expenditure, even while work continues on existing contracts.
Rebecca Larkin, the CPA’s head of construction research, said the recovery expected in the second half of 2027 had been pushed back, particularly in privately financed sectors reliant on confidence and borrowing costs.
Energy distribution, data centres and water infrastructure remain areas of growth, but Larkin warned that rising costs would remain a concern as projects progress.
“Viability has risen up the risk list across construction, particularly in housebuilding, highlighting that supply-side constraints are as big an issue as weak demand,” she said.
