CPA State of Trade survey results show a patchy recovery

CPA State of Trade survey results show a patchy recovery

The CPA State of Trade Survey for the opening quarter of 2025 suggested that even before tariff-related disruption and uncertainty hit the UK economy in April, the construction recovery was taking a little longer to gain momentum.

In Q1, product sales decreased for a balance of 15% of heavy side firms, which comes after three previous quarters of growth. In contrast, a balance of 55% of light side firms reported an increase in product sales, which represents the strongest balance since 2019 Q3, pre-pandemic. This split is likely to reflect the varying stages of the construction recovery by sector, with house builders, commercial and industrial developers still holding back on new starts (reliant on heavy side products) but continuing with projects already underway (moving into phases that use light side products). Completions and finishes within private housing are also likely to have been strong in Q1 ahead of the increase in sales before the changes to stamp duty thresholds at the end of March.

Ongoing areas of strength such as government-funded energy-efficiency schemes dominated by thermal insulation and solar/PV measures are also driving demand towards the light side. Nevertheless, even at the time of polling for the Q1 survey, which was when US President Donald Trump had confirmed the US would be implementing ‘reciprocal’ tariffs, leading to falls in global stock markets and a spike in uncertainty, manufacturers anticipated that product sales would increase throughout 2025 – according to balances of 31% on the heavy side and 80% on the light side.

FIS Members can access the full report here.

Market Data

FIS has access to a wide range of market data from sources including the CPA and Barbour ABI.  In addition, FIS produces a state of trade survey specifically for the finishes and interiors sector.

FIS Submits Member-Informed Response to Government’s Construction Products Reform Consultation

FIS Submits Member-Informed Response to Government’s Construction Products Reform Consultation

FIS responded on behalf if it’s members to the Government Consultation on their Construction Products Reform Green Paper. This paper details plans to increase the oversight of testing and conformity assessment bodies, third party product certification schemes, the role of the general product safety regulations in governing construction products not covered by an existing designated standard. The paper also consults on the introduction of digital product passports and environmental performance characteristics from the new EU Construction Products Regulations along with a suite of measures to enable reuse of construction products. The FIS gathered views from across our membership profile through our working groups and beyond, and we are incredibly grateful to all those who gave their time and expertise to inform a comprehensive response.

In the FIS response we have highlighted the need to review designer responsibility with producer responsibility to ensure key performance and compliance issues are addressed where interface and compatibility issues are essential to overall building performance.  The need to consider future life of materials and ensure regulation does not halt the growing market for product re-use and a more circular approach in its tracks.    We have also touched on the need to balance Intellectual Property consideration with transparency and support to ensure that the compliance environment works to encourage innovation and doesn’t create onerous compliance loops that limit opportunities to modernise methods of construction.  Availability of Standards and the balance a regulator needs to find with respect to robust enforcement and encouraging “black box thinking”.  

Thanks to all members who have shared their views and helped shape our response.  If you have additional views, this is not the end of the road an Government have committed to ongoing consultation around the key subjects raised in this Green Paper. 

The full text of our response can be found here:

Green Paper Consultation – FIS Response

Review the wider CPA response

The Construction Products Association has submitted its consolidated response to the Construction Products Reform Green Paper.

FIS has supported this response and members can review the submission here.

The submission is a consolidated high-level response from CPA Technical Committee, with input from the CPA Sustainability Committee on Chapter 10, and the Industry Competence Steering Group (ICSG) adding broad reference to the competency issues raised by the paper.

Update on Tariffs and Interest Rates from leading Construction Economists

Update on Tariffs and Interest Rates from leading Construction Economists

On 8 May, the U.K. and the U.S. agreed a trade deal. The full details have not been outlined, but overall, the agreement leaves tariffs on most UK goods entering the US at a higher rate (10%) than before the tariff disruptions (around 2.5% on average). There is little direct economic impact given that only 2% of GDP comes from goods exports to the U.S., but it is helpful that the U.K. has agreed to a trade deal to prevent the risk that tariffs go up substantially at the end of the 90-day pause. It may also be a strong positive for some affected sectors and companies. For example, for U.K. steel and aluminium, the U.S. tariffs of 25% announced in March have been reduced to zero. However, it is currently unclear whether this will also apply to steel and aluminium derivative products as well, so the full details of the agreement will be important.  Interest rate cuts announced yesterday have already been factored in to growth forecasts, but should provide stimulus, particularly in the housing sector.

CPA Market Data

FIS works with a number of companies to  monitor the market performance and provide critical information to our members.

U.S. Tariff uncertainty threatens to overshadow UK construction growth

U.S. Tariff uncertainty threatens to overshadow UK construction growth

Excluding the potential impacts of the recent U.S. tariff disruption on the global and UK economies, the Construction Products Association’s Spring Forecasts, published today, show that construction output is only expected to recover gradually. Following two challenging years that have particularly affected the two largest sectors – private housing new build and repair, maintenance and improvement (rm&i) – total construction output is expected to grow by 1.9% in 2025 and 3.7% in 2026, from a low base.

This is a slight revision down from the Winter Forecasts due to a slow start to activity this year, weaker UK economic growth prospects, higher inflation for longer and subdued consumer and business confidence. Furthermore, rises in the National Living Wage, employers’ National Insurance Contributions, and falling thresholds, from 1 April, will increase costs throughout the supply chain.

In private house building, activity continues to recover gradually, but house builders reported that it has been a slower start to this year than anticipated, as affordability and a lack of demand remain the key constraints, with mortgage rates remaining high and no government policy stimulus. Furthermore, developers working on high-rise apartment blocks continue to suffer from 6-9 month delays at the Building Safety Regulator, which disproportionally affects new house building in London and Build-to-Rent developments. On the positive side, however, the Government published its National Planning Policy Framework, and its Planning and Infrastructure Bill is currently being passed in parliament. This may help deal with one constraint, but according to larger house builders, activity from the measures is unlikely to be seen on the ground until at least 2027 due to developments already in the pipeline with planning permission. Overall, private housing output is forecast to rise by 4.0% in 2025 and 7.0% in 2026 and the risks remain weighted to the downside.

Private housing rm&i is the second-largest construction sector, and it continues to benefit from a consistent stream of energy-efficiency, solar photovoltaic and cladding remediation work. Outside of this, however, rm&i activity has been slow to start this year. A rush in property transactions before Stamp Duty changes on
1 April and a strong link between transactions and home improvement work within the first 6-9 months of moving in were expected to lead to a recovery in the sector in 2025 H2. This is especially the case as households have now had a sustained period of real wage growth and many homeowners have finance available for home improvements. This may still be the case, but the key is whether they will be confident enough to spend it, and a recent increase in the savings ratio suggests that households are more focused on saving rather than big-ticket item spending. Overall, private housing rm&i output is expected to rise by 2.0% in 2025, with any growth at the backend of the year, and 3.0% in 2026.

In infrastructure, the third-largest construction sector, activity continues to remain strong on major projects such as Hinkley Point C and HS2, whilst the Lower Thames Crossing has been given the go-ahead as expected, although construction work will still not start until 2027, and it will be privately financed. Energy generation activity will be the key driver of growth as wind farm activity ramps up and increases in capital expenditure in the water sub-sector to deal with high-profile water quality issues will also lead to a step-change in activity from 2026. However, whilst the headlines coming from government suggest record levels of investment in roads near-term, spending on road projects this year will be £5.0 billion less than it previously has been, and only two large road projects are expected to start this year. As a result, roads output is forecast to fall this year. Overall, infrastructure output is expected to rise by 1.8% in 2025 and 4.5% in 2026.

Commenting on the Spring Forecasts, CPA Head of Construction Research, Rebecca Larkin, said:

“After a difficult couple of years, the fundamentals still point towards a return to growth in construction activity in 2025 and 2026. A gradual improvement in UK economic activity and government’s commitment to capital expenditure should boost demand, whilst government’s easing of planning for house building, infrastructure, data centres, gigafactories, schools, hospitals, and prisons should also help delivery in the medium-term.

“The big risk is the potential impacts of the U.S. tariff disruptions in April. There is likely to be only a limited direct impact of tariffs on construction as three-quarters of construction products used in UK construction are sourced domestically. Even when the UK imports construction products, two-thirds are from the EU. However, this could be overshadowed by any effects on global and UK economic growth and the increase in uncertainty. This uncertainty adds a higher risk over the cost of new large projects, contractors working on existing fixed-price contracts and is also likely to dent investor confidence. As a result, it could mean a delay or hiatus in contract awards and tenders for new, large commercial, industrial and build-to-rent developments, in addition to less appetite for private investment in infrastructure.

“The CPA is forecasting construction output to rise by 1.9% in 2025, and over three-quarters of this growth (79%) is expected to be driven by private sector investment. UK construction is pro-cyclical, meaning construction activity moves in line with the UK economy. Nevertheless, construction activity is also three times more volatile than the UK economy so it would not take a significant hit to global and UK economic growth for construction growth to be badly affected over the next 12-18 months.”

Market Data

FIS has access to a wide range of market data from sources including the CPA and Barbour ABI.  In addition, FIS produces a state of trade survey specifically for the finishes and interiors sector.

CPA Economic and Construction Update

CPA Economic and Construction Update

The CPA’s Economic and Construction Update provides an insightful summary of the latest economic and construction trends in the UK. The update covers key indicators such as the CPI inflation and core CPI inflation, UK construction average weekly earnings, UK construction insolvencies, UK house price index, and the UK residential market survey.

The latest weekly update includes:

  • RIBA Future Trends Survey (March 2025)
  • British Property Federation Build-to-Rent (2025 Q1)

The CPA’s Spring Forecasts will be published on Monday 28 April and FIS members will have exclusive access to this via our membership of CPA.

The update is an excellent resource for anyone interested in the UK construction industry, and the contents page allows readers to easily navigate to the sections that are most relevant to their interests.

In addition to this update, the CPA also publishes Construction Forecasts twice a year. Members can download these forecasts from the FIS website here.

Support Better Standards for BIM Object Data

Support Better Standards for BIM Object Data

We’re sharing a research-led initiative (led by Diane Tocco, a member of our Organisational Excellence Working Group) that explores how manufacturers manage and maintain their BIM objects—focusing on the accuracy, consistency, and structure of the data they contain. The aim is to identify where current industry practices succeed or fall short, and how technology—particularly automation and AI—can help improve data quality across the supply chain.  This short survey is aimed at manufacturers whose products are used in commercial building projects—including architectural, MEP, and FF&E components—and who already have Revit Families for at least one fixed product range. By contributing, you’ll be helping shape a more consistent and efficient approach to BIM object creation and data compliance.

https://www.surveymonkey.com/r/HTBFSTH

As a thank you, all participants will be entered into a prize draw to win a Bose SoundLink Flex Portable Speaker (2nd Gen) (RRP £149.95)  Whether you’re already producing BIM content or just starting to explore it, your insight is valuable. Thank you for taking part.  Diane will be sharing the results with our Working Group in support of our work.