30/09/2026
Walk into any conversation about construction right now and you'll hear two things simultaneously: the market is terrible, and it's about to turn. In the April–June quarter, building and construction manufacturers across all three markets we track were sitting on dramatically less stock than a year ago; -70% in the UK, -72% in New Zealand, 35% in Australia. Revenue followed: down 48%, 41% and 44% respectively.
Research into the pipeline data tells a more complicated story. UK construction new orders fell 11.8% in the quarter even as overall output edged higher than Q1 (ons.gov.uk). Australian dwelling approvals rose 7.2% in June, reaching their highest annual total since 2020-21 (abs.gov.au). New Zealand building activity rose 4.8% in the quarter, the first positive annual comparison in two and a half years (stats.govt.nz).
But approvals are permissions, not orders. A dwelling approval does not put materials on a truck. The gap between a consent being granted and a manufacturer receiving a purchase order can be six months, sometimes longer. And in the meantime, purchase orders in the sector are still falling - down 31% year on year in the UK, 50% in Australia, 47% in New Zealand. The pipeline is showing early signs of life. The factory floor has not felt it yet.
That gap is where the real decision lives. Manufacturers who cut inventory too aggressively now risk being unable to supply when demand does return - and in construction, when it returns, it tends to return quickly. Those who hold on too long tie up cash through an extended downturn with no guarantee of timing.
Which is the bigger risk right now: holding too much stock through a weak market, or cutting too deeply before demand returns?
The full construction data - revenue, margins, inventory and purchasing across all three markets - is in the April–June 2026 Manufacturing Health Index: https://ow.ly/T7lT50ZQSku