Demand from construction was clearly held back by uncertainty over the late Autumn Budget during the quarter.
It was a difficult end to 2025 for construction product manufacturers, according to the Construction Products Association’s latest State of Trade Survey.
Sales volumes fell during the quarter for heavy side manufacturers and although light side sales were reported to have increased, it was the weakest performance in 18 months.
In 2025 Q4, a net balance of 81% of heavy side manufacturers reported a decrease in product sales volumes, compared to the previous quarter. This was the lowest balance since 2020 Q2, mid-pandemic. Heavy side sales were also lower compared to a year earlier. For light side manufacturers, growth in sales was reported by 13% of firms, although this was the lowest balance since 2024 Q3.
Underscoring that demand was not the only struggle in Q4, product manufacturers also reported continued inflationary pressure. All manufacturers reported that wages and salaries increased compared to year earlier, with the heavy side in particular also recording widespread increases in taxes, fuel costs and energy costs. Manufacturers cited ‘demand’ as the factor most likely to constrain demand – and the recovery – over the next 12 months.
Rebecca Larkin, CPA Head of Construction Research, said: “Demand from construction was clearly held back by uncertainty over the late Autumn Budget during the quarter. The problem is that this combined with the long-running caution that had characterised sentiment for most of the year and held back large new build project starts, house building and home improvements spending which, in turn, has limited demand for heavy side products in particular.
"Even though there turned out to be no major tax rises announced for the near-term in the Budget, product manufacturers are still contending with the impact of the government’s previous fiscal decisions that have raised the business tax burden and increased labour costs. At a time when there are no tangible signs of demand improving, the warning lights are starting to flash for the construction supply chain.”
Key survey findings include:
