The latest UK construction figures suggest that the market may be beginning to stabilise, but there is little evidence yet of a sustained recovery.
Construction activity is declining more slowly according to the latest industry survey, but new orders remain weak, housebuilding continues to struggle and demand for key construction materials is well below historical levels.
Perhaps most significantly, new forecasts from the Mineral Products Association (MPA) suggest that a meaningful recovery in demand for heavy-side construction materials may not arrive until 2028.
For building product manufacturers and suppliers, the message is increasingly clear: even where longer-term opportunities exist, the timing and location of future demand will be critical.
UK construction activity continues to contract
The latest Office for National Statistics construction output figures show that total output fell by 1.0% in the three months to August 2026, the second consecutive decline in the three-monthly series.
New work fell by 1.4%, while repair and maintenance declined by 0.3%. Private new housing was the largest contributor to the overall fall, with output down 3.2%.
The monthly figures were also disappointing. Construction output declined by 0.2% in August, following downwardly revised falls of 0.5% in July and 0.3% in June.
These revisions are important. What had previously appeared to be a marginal improvement in July is now part of a more prolonged period of declining activity.
There was, however, a slightly more encouraging signal from the latest S&P Global UK Construction PMI.
The headline index increased from 44.3 in August to 46.1 in September, indicating the slowest decline in construction activity since January.
Although this represents an improvement, the index remains below the 50-point threshold that separates expansion from contraction.
All three major sectors recorded slower declines. Commercial construction was the most resilient, with an index of 48.5, while housing remained the weakest at 40.7.
However, the survey also showed that new orders fell at their fastest rate for three months, employment declined and business confidence dropped to its lowest level since May.
The distinction is important. Construction activity may be falling more slowly, but the flow of new work remains insufficient to support a convincing recovery.
Construction materials recovery could be delayed until 2028
One of October’s most significant developments is the publication of the MPA’s Regional Overview of Construction and Mineral Products Markets in Great Britain.
The report forecasts that demand for heavy-side construction materials will decline for a fifth consecutive year in 2026. It anticipates a slow recovery from late 2027, but a more meaningful improvement is not expected until 2028.
This is a particularly important indicator because demand for aggregates, ready-mixed concrete, asphalt and mortar provides a direct measure of activity across housebuilding, infrastructure and other construction markets.
The outlook reflects the prolonged weakness in new-build housing, alongside delays and uncertainty affecting major projects.
The latest Department for Business and Trade building materials statistics, published on 7 October and also examined in BCIS’s October commentary, reinforce the scale of the challenge.
Brick deliveries increased by 12.6% between July and August, while concrete block deliveries rose by 5.9%. These are welcome improvements following particularly weak July figures.
However, both products remain significantly below their historical levels.
- Brick deliveries were 10.1% lower than August 2025 and 32.2% below August 2019.
- Concrete block deliveries were 6.5% lower year-on-year and 23.5% below August 2019.
- Brick stocks stood at 543 million, almost 40% above their pre-pandemic level.
- Concrete block stocks were 46.8% higher than a year earlier.
The wider picture is equally challenging. Sand and gravel sales in the second quarter of 2026 were at their lowest level in the available data, while ready-mixed concrete deliveries remained more than a third below their equivalent 2019 level.
For manufacturers, these figures highlight the difference between an occasional monthly improvement and a sustained recovery in demand.
They also raise questions about future production capacity. Prolonged weakness can lead to reduced investment, job losses and site closures, potentially making it harder for domestic supply chains to respond quickly when demand eventually returns.
Regional construction markets are moving in different directions
Another important finding from the MPA report is the extent to which construction conditions vary across Great Britain.
In 2025, construction output increased by 7.1% in the North East, while Wales experienced a decline of 10.3%.
The East Midlands was the only region to record growth in sales across all mineral product categories.
These differences underline why national construction figures can sometimes conceal significant variations in local market conditions.
The MPA expects infrastructure investment, particularly in energy generation, water and sewerage, to support demand in areas including the East of England, Wales and Scotland.
This is also relevant to the Government’s wider devolution agenda. Greater local control over housing, transport and regeneration could help strengthen regional construction pipelines, although much will depend on funding certainty, planning capacity and the ability to bring projects forward.
For building product manufacturers and suppliers, understanding where demand is likely to emerge may become just as important as forecasting how much the overall market will grow.
A business exposed to major infrastructure programmes in one region could experience very different conditions from a supplier heavily dependent on private housebuilding elsewhere.
Housebuilding remains under pressure
Housing continues to be the most consistently weak part of the construction market.
The latest PMI confirms that residential activity is contracting more sharply than commercial construction or civil engineering. Meanwhile, ONS figures show that private new housing remains a major drag on overall construction output.
The difficulties extend beyond private development.
A new review of The Housing Forum’s 1.5M New Homes: The Local Government Challenge found that eight of the 16 responding councils reported worsening development viability over the previous year, while the remaining eight reported no improvement.
Councils identified construction costs, financing pressures, borrowing constraints and insufficient grant funding as major obstacles to delivering new social housing.
Although the review covers a relatively small, self-selecting group of councils, its findings reinforce a wider concern: the need for new housing remains substantial, but many projects are struggling to become financially viable.
This distinction between housing need and effective construction demand is particularly relevant for manufacturers supplying the residential market.
Government housing ambitions may point towards significant long-term opportunities, but they do not automatically translate into orders for bricks, blocks, insulation, roofing products, windows or other building materials.
Until more developments become viable and progress to site, demand is likely to remain subdued.
Infrastructure and public investment offer a more positive outlook
Despite the difficult near-term conditions, the longer-term outlook is not uniformly negative.
The latest CITB Construction Workforce Outlook 2026–2030 forecasts that total construction output will grow by 1.8% in 2027 and 2.8% in 2028, followed by more moderate growth of 2.3% in 2029 and 2.1% in 2030.
Infrastructure and public housing are among the sectors expected to support growth, while investment in energy, transport and other major projects offers opportunities for parts of the construction supply chain.
There are also opportunities in retrofit and refurbishment, as building owners respond to energy efficiency requirements and the need to improve existing assets.
The CITB forecast and the MPA’s more cautious outlook are not necessarily contradictory.
CITB is forecasting total construction output, while the MPA is assessing demand for mineral products. Growth in refurbishment, building services and certain specialist sectors may not generate the same level of demand for aggregates, concrete and other heavy-side materials as new-build housing or major civil engineering projects.
This is an important distinction when assessing market prospects for individual construction product categories.
Cost pressures and skills remain barriers to recovery
Weak demand is only part of the challenge facing construction businesses.
The latest PMI reported continued increases in fuel, freight and raw material costs, even though the overall rate of input price inflation eased during September.
The latest Government building materials statistics show that the construction materials price index for all work increased by 6.4% in the year to August 2026, up from 5.9% in July.
However, price movements varied considerably between materials. Fabricated structural steel and rigid pipes and fittings recorded substantial annual increases, while prices for ready-mixed concrete and cement fell slightly.
Meanwhile, the industry faces continuing concerns about workforce availability and future capacity.
The Government’s new Construction Jobs Plan, published in October, sets out measures to strengthen recruitment, training and workforce planning across the industry.
The plan includes commitments to expand apprenticeships, training placements and other routes into construction careers.
These initiatives are welcome, but the benefits will take time to emerge.
There is a difficult balance for the industry. Businesses need sufficient work to retain and develop their workforce today, while also maintaining the capacity to deliver the infrastructure and housing programmes expected over the coming years.
If prolonged weak demand results in further reductions in manufacturing and construction capacity, it could create additional cost and delivery pressures when activity eventually strengthens.
Final thoughts from Leading Edge
October’s construction data suggests a market that may be stabilising, but one where the prospects for recovery remain uncertain.
The improvement in the Construction PMI is encouraging, particularly in commercial construction, but the continued decline in new orders suggests that confidence in future workloads remains fragile.
At the same time, the MPA’s forecast of a fifth consecutive year of falling mineral products demand highlights just how prolonged the downturn has become for many manufacturers.
What is becoming increasingly apparent is that there may not be a single, clearly defined recovery across the UK construction market.
Different sectors, regions and product categories are likely to recover at different rates.
Infrastructure investment, public-sector projects and retrofit activity offer opportunities, but private housing remains constrained and many proposed developments face significant financial and delivery challenges.
For construction product manufacturers and suppliers, this makes it particularly important to understand not just whether the market is expected to grow, but which sectors and regions will drive that growth, when projects are likely to progress and how demand for specific products may change.
The longer-term outlook offers reasons for optimism. However, October’s evidence suggests that many businesses will need to plan for another challenging period before a broader improvement in construction demand takes hold.
Sources: ONS | S&P Global PMI | MPA | DBT | BCIS | CITB | Inside Housing | GOV.UK Construction Jobs Plan
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