Supplying Timber Issue 9 0 - Autumn 2025 - Flipbook - Page 25
———— 2026 CONSTRUCTION INDUSTRY FORECAST ————
Planning reform remains
ambitious but unproven
The Planning and Infrastructure
Bill is seen as critical to
unlocking housing growth, yet
it is still too early to assess its
e昀昀ectiveness.
Michael Cameron, Lead
Policy Analyst at DeHavilland,
describes the Bill as “both an
evolution and a gamble… it
reforms the planning system,
arguably, more than any
Government in a generation".
While its measures to streamline
approvals and limit judicial
reviews could speed up delivery,
success depends on secondary
legislation and local authority
capacity to implement reforms.
Timber frame manufacturers
and modular builders, whose
business models rely on rapid
project delivery, are particularly
exposed to whether this reform
agenda from government
succeeds.
Persistent supply chain
pressures
Material price volatility remains
one of the biggest threats to the
sector’s recovery.
The CPA emphasises that
“chemicals, electronics,
energy, food products, metals,
packaging, and timber were all
reported to have risen in price in
the PMI.”
While timber prices have
largely stabilised since their
post-pandemic highs, energy
costs, shipping delays, and
geopolitical tensions could still
reverse this trend, potentially
threatening margins for
developers and suppliers.
Insolvencies, especially among
small and medium-sized 昀椀rms,
are another area of concern, as
tighter credit conditions could
limit contractors’ ability to scale
up even if demand strengthens.
A fragile but promising
outlook for timber
Timber remains central to
construction’s transition to
sustainable practices, and its
adoption in the mainstream
construction sector will likely
accelerate over the next two
years.
O昀昀-site timber solutions o昀昀er
a way to achieve housing and
net-zero targets e昀케ciently,
making it a material of choice
for both private and public
projects.
However, like the construction
industry as a whole, its
growth is intertwined with
broader economic stability,
e昀昀ective reform delivery, and
infrastructure investment. The
industry faces major challenges
that could derail momentum if
the UK's economic or political
conditions worsen.
By 2027, construction output
may well have recovered from
recent lows, with housing
leading demand and timber
昀椀rmly embedded in the UK’s
building strategy. But success
will depend on the industry’s
ability to navigate high costs,
regulatory hurdles, and volatile
global markets.
SUPPLYING TIMBER
25
AUTUMN 2025
"The forecasts envisage
demand and activity
gradually picking up but,
with all the uncertainties
around the economy, the
key question for housing
newbuild and RM&I is
still 'when'.
"The government focus
on capital investment
in the Spending Review,
plus the 10-year
infrastructure strategy,
have helped plot a path
to long-term growth, but
it is looking increasingly
likely the Chancellor will
need to raise taxes or cut
capital expenditure – or
both – in the Autumn
Budget. This would
directly a昀昀ect the largest
private [and public]
construction sectors,
depending on where
expenditure cuts fall.”
Rebecca Larkin, CPA's
Head of Construction
Research
THE MARKET
commitments such as the £104
billion water infrastructure
plan, but the CPA report warns
that political changes could
derail these programmes,
particularly if a new government
reprioritises capital investment.
The ripple e昀昀ect of
infrastructure development
on housing and commercial
demand will be important for
timber manufacturers, but
delays or funding revisions
remain a risk.
