IN Brief:
- The Construction Products Association forecasts a 4.0% fall in construction output in 2026, followed by growth of just 0.4% in 2027.
- Contractors are seeking a dependable project pipeline and greater support for apprenticeships, specialist training and workforce retention.
- Industrial land availability, infrastructure connections and development costs remain constraints on investment.
Construction leaders are urging Chancellor John Healey to provide greater certainty over infrastructure investment, workforce development and the costs of delivering projects in today’s Autumn Budget, as the industry’s latest forecasts suggest only a marginal recovery next year.
The Construction Products Association (CPA) expects UK construction output to contract by 4.0% in 2026 before rising by just 0.4% in 2027. The outlook reflects higher energy and financing costs, weakened confidence among private-sector clients, and the effects of continued international economic disruption.
Private housing output is forecast to decline by 10.0% this year and a further 3.0% in 2027. Repair, maintenance and improvement work is also expected to contract, while infrastructure projects remain comparatively resilient.
Against that backdrop, construction businesses want the Budget to give contractors a clearer basis for investment in equipment, workforce capacity and specialist capabilities.
Adrian Corrigan, President of the National Federation of Demolition Contractors (NFDC), said: “Demolition plays an essential role in regeneration and redevelopment, yet its contribution is often overlooked. A strong and reliable pipeline of projects would give our members the confidence to invest in their businesses, equipment and workforce.”
The federation wants sustained infrastructure commitments and practical assistance for businesses. It is also calling for greater support for apprenticeships and specialist training, alongside incentives for material reuse and recovery.
Demolition and site preparation often precede major redevelopment programmes, requiring contractors to commit resources before substantial construction activity begins. Uncertainty over project commencement can therefore affect decisions on plant purchases, equipment utilisation and recruitment.
The workforce remains another concern. Construction employers need workers with specialist qualifications and practical site experience, while training new entrants requires supervision and continued investment beyond initial recruitment.
Rebecca Turner, People Director at construction workforce management specialist MSite, expects the Budget to place greater emphasis on youth employment, apprenticeships and targeted hiring incentives. She has warned, however, that short-term employment initiatives will achieve little without support for progression and retention.
“A hiring incentive should be the beginning of someone’s career, not the end of the government’s support. Any new package must prioritise retention, training and progression, not simply the number of jobs created,” Turner said.
Her comments reflect the challenge facing smaller contractors, which may lack the resources to provide sustained mentoring and specialist training while maintaining delivery schedules and managing rising employment costs.
Development viability is also being affected by the availability of suitable sites and supporting infrastructure.
Nick Diment, Director and Head of London and South East at planning consultancy Boyer, is calling for industrial and logistics development to receive greater recognition within the government’s economic growth plans.
He said: “Employment land must be recognised as essential economic infrastructure and allocated alongside housing to support balanced, sustainable growth.”
Diment argues that employment sites must be supported by reliable electricity supplies, transport connections and other utilities if manufacturers and logistics operators are to invest and expand. Identifying land for development without providing the necessary infrastructure risks leaving schemes commercially or technically undeliverable.
Business rates and property costs present further complications. Andy Backhouse, Co-founding Director of Sixteen Real Estate, has highlighted the effect of industrial rents, rates and employment costs on businesses considering new premises or additional capacity.
Infrastructure remains one of the more resilient parts of the construction outlook. The CPA forecasts growth of 2.5% in infrastructure output during 2026 and 2.9% in 2027, supported by activity in energy distribution, water infrastructure and other established programmes.
Construction companies will be looking for commitments that can translate into a dependable pipeline of projects, alongside sustained funding for technical skills and measures that improve development viability. The timing and deliverability of spending decisions will be especially important to contractors determining whether to expand their workforce and equipment capacity.
