The Construction Products Association’s State of Trade Survey for the first quarter of 2026 showed that sales volumes fell for both heavy side and light side product manufacturers. Accompanying this, all manufacturers reported an increase in costs, particularly for fuel, energy and raw materials.
In 2026 Q1, a net balance of 14% of heavy side manufacturers and 18% of light side manufacturers reported a decrease in product sales volumes, compared to the previous quarter. This was the first time that both segments of product manufacturing have reported a decline in over two years. Heavy side sales were also lower compared to a year earlier. For light side manufacturers, annual growth in sales was reported by just 9% of firms, on balance.
In a quarter in which oil prices spiked above $100 per barrel, product manufacturers reported clear inflationary pressure. All manufacturers reported that fuel and raw materials costs increased compared to year earlier, with the heavy side also recording widespread increases in energy costs. This adds to last year’s rises in employers’ National Insurance Contributions and the National Living Wage, which all significantly increase the manufacturing cost base.
Rebecca Larkin, CPA Head of Construction Research said: ‘The effects of persistent rainfall in the first half of the quarter and the start of the Middle East conflict in the second half showed up clearly in construction product manufacturing. By this point, industry’s hopes had been for early momentum to be building into a Spring recovery but instead, a fall in sales and a notable increase in input costs lay the base for another challenging year.
‘Some damage has already been done, given the adverse effects of spikes in oil and industrial energy costs, which can account for up to one-third of total costs for manufacturers, particularly those on the heavy side. The outlook for construction over the rest of the year has undoubtedly deteriorated, given the uncertainty over the extent of cost rises and the impact on confidence, spending and investment. However, there are potential upside risks if the government provides stimulus for house building and home improvement and reduces its extensive list of cost burdens on the industry, which are set to increase further near-term given the incoming 50% import tariff on steel products in July, the Building Safety Levy in October and its Future Homes and Building Standards from March 2027.’
Key survey findings include:
- A balance of 14% of heavy side firms reported that construction products sales fell in 2026 Q1 compared with 2025 Q4.
- On balance, 18% of light side manufacturers reported that product sales decreased in Q1, which was the lowest balance since 2023 Q4
- Sales also decreased in annual terms for half of heavy side manufacturers, on balance. Only 9% of light side firms reported an annual increase in sales
- Overall costs were reported to have increased by all manufacturers on both the heavy side and the light side
- Input cost inflation was led by increases in fuel, energy and raw materials costs
Further information is available in the CPA’s State of Trade Survey. TTA members can access the document free of charge, which each have a value of £100, as part of their TTA membership benefits using the Members’ Area.
