{"id":887927,"date":"2026-01-26T22:12:01","date_gmt":"2026-01-27T04:12:01","guid":{"rendered":"https:\/\/newsycanuse.com\/index.php\/2026\/01\/26\/construction-growth-downgrade-sparks-insolvency-fears\/"},"modified":"2026-01-26T22:12:01","modified_gmt":"2026-01-27T04:12:01","slug":"construction-growth-downgrade-sparks-insolvency-fears","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2026\/01\/26\/construction-growth-downgrade-sparks-insolvency-fears\/","title":{"rendered":"Construction growth downgrade sparks insolvency fears"},"content":{"rendered":"
\n

Construction output is expected to grow by just 1.7 per cent in 2026 amid ongoing geopolitical uncertainty, a trade body has warned.<\/p>\n

The forecast is a major downgrade on previously predicted growth of 2.8 per cent, made last autumn, the Construction Products Association (CPA) said.<\/p>\n

In a new report, published on Monday (26 January), the CPA said there remained a \u201cvast array of uncertainties and risks in construction that could have a major impact on near-term forecasts for each construction sector and sub-sector\u201d.<\/p>\n

Factors such as geopolitical tension, high costs, increased tax and the skills crisis are exacerbating the problems, the body warned.<\/p>\n

\u201cMany firms have had to assume that activity in 2026 will be similar to 2025 levels,\u201d the CPA said.<\/p>\n

\u201cThis points to a rise in insolvencies and job layoffs in firms across the supply chain working in some sectors, such as housing new-build and repair, maintenance and improvement, as well as new large commercial developments, unless there is a rapid improvement in activity.\u201d<\/p>\n

In private housing \u2013 the largest construction sector \u2013 the CPA warned there was \u201clittle to suggest a large increase in housebuilding activity this year\u201d.<\/p>\n

Housebuilding volumes need a \u201csharp rise\u201d in demand, but the CPA said this was unlikely without \u201cdemand-side stimulus\u201d.<\/p>\n

The forecast for the private housing repairs and maintenance sector \u2013 construction\u2019s second largest market \u2013 was revised down to a contraction of 1 per cent in 2026, marking a second year of decline, the CPA said.<\/p>\n

The body added that the \u00a315bn Warm Homes Plan<\/a>, announced last week, was \u201cunlikely to lead to notable growth in the near-term\u201d.<\/p>\n

One bright spot is infrastructure, where output is forecast to rise by 3.9 per cent in 2026, although this is unchanged from a forecast last autumn. The increase is being driven by energy generation and distribution and increased investment in water infrastructure under AMP8, although it is balanced against the fear that the HS2 reset will delay activity.<\/p>\n

CPA\u2019s head of construction research Rebecca Larkin said: \u201cWe enter 2026 with little to suggest that the conditions that held back construction over the past 12 months are improving: slow economic growth, weak business and consumer confidence and risk aversion resulting in subdued activity in the major sectors of construction.<\/p>\n

\u201cWith hopes of a recovery consistently dashed last year, firms in the construction supply chain are bracing themselves for another difficult year that is still laced with risks, challenges and uncertainty.\u201d<\/p>\n

A separate report, also published on Monday by Turner & Townsend (T&T), offered a slightly rosier picture as it said despite weak demand, high interest rates and regulatory constraints \u201cwell-funded and viable projects continue to move forward\u201d.<\/p>\n

T&T said it was maintaining its estimate for tender price inflation despite the \u201crecent weakening in 2025\u201d.<\/p>\n

But it added: \u201cThe balance of labour pressure and the possibility that material prices could move needs careful monitoring if the pipeline improves.\u201d<\/p>\n

Looking ahead, T&T said \u201cexpectations for future activity into 2026 are improving as inflation eases and borrowing conditions gradually stabilise\u201d.<\/p>\n

Mace Consult<\/a> also revealed its latest quarterly market view on UK construction, which highlighted that new orders increased by 9.8 per cent in Q3 2025.<\/p>\n

The firm said that with material prices slowly \u201cticking up\u201d, it had left its tender prices unchanged.<\/p>\n

But Oliver North, director of cost and commercial management, UK and Europe at Mace Consult, said:\u202f \u201cIn light of the ongoing economic backdrop, it seems vital that government-backed projects continue in order to support the sector.\u201d<\/p>\n<\/div>\n

Read More<\/a>
\n James Wilmore<\/p>\n","protected":false},"excerpt":{"rendered":"

Construction output is expected to grow by just 1.7 per cent in 2026 amid ongoing geopolitical uncertainty, a trade body has warned. The forecast is a major downgrade on previously predicted growth of 2.8 per cent, made last autumn, the Construction Products Association (CPA) said. In a new report, published on Monday (26 January), the<\/p>\n","protected":false},"author":1,"featured_media":887928,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2808,23317],"tags":[],"class_list":{"0":"post-887927","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","8":"category-growth"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/887927","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=887927"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/887927\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/887928"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=887927"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=887927"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=887927"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}