‘Urgent’ Action Needed to Cut Construction Costs, Says Minerals Body

Why It Matters

The data signals a widening demand gap that could stall housing starts and infrastructure projects, making swift policy action crucial for the sector’s recovery.

Key Takeaways

• Mortar sales fell 5.4% YoY in Q1 2026.
• London concrete volumes 47% lower than 2022 levels.
• Ready‑mixed concrete down 0.5% and sand/gravel down 5% Q1.
• MPA urges targeted cost‑cut measures and a super‑deduction tax relief.
• Calls for rapid infrastructure funding and homebuyer financial support.

Pulse Analysis

The UK construction sector is confronting a dual shock: lingering domestic weakness and a fresh external pressure from the Iran‑related conflict in the Middle East. Material costs, already volatile after post‑pandemic supply‑chain disruptions, are climbing as freight rates rise and raw‑material imports face geopolitical uncertainty. This environment is reflected in the Mineral Products Association’s latest figures, which show a steep drop in mortar sales—a leading proxy for house‑building activity—and a historic slump in concrete volumes across London. The broader market sentiment is one of caution, with developers delaying projects and builders’ merchants reporting double‑digit sales declines.

In response, the MPA’s four‑point agenda targets the cost side of the equation and seeks to reignite demand. A “super‑deduction” would temporarily allow firms to write off a larger proportion of qualifying capital expenditure, echoing the UK’s 2021 tax incentive that spurred a wave of investment. Coupled with targeted subsidies to lower material prices and a push for rapid public‑funded infrastructure—particularly road maintenance—the association hopes to create a more favorable cost base. The call for financial support for new homebuyers also aims to fill the gap left by the 2023 termination of the Help to Buy scheme, which had previously buoyed first‑time buyer activity.

If policymakers act swiftly, the sector could avoid a prolonged downturn that would ripple through related industries such as steel, timber and logistics. Conversely, a delayed response may exacerbate the housing shortage, push up rental prices and erode the UK’s construction export competitiveness. Investors are watching for signals of fiscal commitment, as the combination of tax relief and infrastructure spending could restore confidence, stabilize material demand, and set the stage for a modest recovery in the latter half of the year.