{"id":567099,"date":"2026-05-05T08:40:14","date_gmt":"2026-05-05T08:40:14","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/567099\/"},"modified":"2026-05-05T08:40:14","modified_gmt":"2026-05-05T08:40:14","slug":"recession-fears-deepen-as-building-faces-sharp-decline","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/567099\/","title":{"rendered":"Recession fears deepen as building faces sharp decline"},"content":{"rendered":"

Forecasters at the Construction Products Association say the sector faces a tough 12\u201318 months, with oil and industrial energy price spikes already feeding into double-digit product inflation and forcing clients to delay schemes.<\/p>\n

The downgrade marks a sharp reversal from the CPA\u2019s winter outlook, with risks now \u201cheavily skewed to the downside\u201d as the fallout from Middle East tensions intensifies.<\/p>\n

<\/a><\/p>\n

Private housing is expected to take the biggest hit. Output is forecast to slump 7% this year as higher mortgage rates, falling buyer confidence and worsening site viability stall new starts. The housing repair, maintenance and improvement market will also shrink sharply, down 8%, as households rein in discretionary spending.<\/p>\n

There is some resilience elsewhere. Infrastructure is still tipped to grow 3.2% in 2026, supported by long-term energy and water programmes, although rail and roads pipelines are showing cracks under cost pressure.<\/p>\n

Key sector activity forecast<\/p>\n

\"\"<\/a><\/p>\n

Rebecca Larkin at the CPA said: \u201cThe direct impact on construction will be double-digit construction product price inflation\u2026 Indirectly, increases in inflation across the economy will also hit confidence and spending or investment.\u201d<\/p>\n

<\/a><\/p>\n

Even if disruption ended immediately, economists warn damage is already baked in after months of volatile energy and materials pricing.<\/p>\n

The outlook now hinges on how long the Gulf conflict drags on \u2014 and how hard it hits inflation, interest rates and investor appetite.<\/p>\n

The CPA has modelled two diverging paths depending on how the crisis unfolds mapping a worse and better case scenario amid the ongoing uncertainty in the Gulf.<\/p>\n

Construction output forecast scenarios
\n2026
\n2027
\n2028<\/p>\n

Worse-case scenario
\n-4.7%
\n+1.1%
\n+2.8%<\/p>\n

Better-case scenario
\n0.0%
\n+2.2%
\n+3.6%<\/p>\n

In a downside scenario, the UK tips into recession with interest rate hikes, rising unemployment and falling house prices. That would drive a 4.7% collapse in construction output in 2026, with private housing down 10% and commercial work sliding 6% as developers shelve schemes.<\/p>\n

At the other end, a more stable outcome \u2014 with only limited rate rises and government stimulus such as a potential \u201cFreedom to Buy\u201d scheme \u2014 would see output hold flat in 2026 before recovering.<\/p>\n

<\/a><\/p>\n

<\/a><\/p>\n

\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"Forecasters at the Construction Products Association say the sector faces a tough 12\u201318 months, with oil and industrial…\n","protected":false},"author":2,"featured_media":260169,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":["post-567099","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/567099","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=567099"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/567099\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/260169"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=567099"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=567099"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=567099"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}