Statement from John Newcomb, CEO of the Builders Merchants Federation and
Peter Caplehorn, CEO of the Construction Products Association, co-chairs of the Construction Leadership Council’s Material Supply Chain Group.
The third quarter of the year has shown flat or declining sales of building materials compared to 2024, with no significant recovery expected before 2026.
Product availability is generally good, although there are isolated reports of shortages in metalwork, concrete tiles, coatings, and plain tiles, the latter caused by manufacturing issues. In a largely stagnant market, prices have mostly stayed stable.
However, there is increasing concern about the overall state of the construction market.
The past few months have experienced persistent pressures across the supply chain. The consensus within the group is that this remains one of the most challenging trading environments in over ten years, characterised by sustained weakness in demand, margin pressures, and limited signs of recovery. Many businesses are facing short-term financial difficulties and decreased confidence, with forecasts suggesting that the market as a whole is expected to remain essentially flat in the near future, although there are small pockets of growth, including energy generation, energy efficiency such as solar PV and heat pumps, data centres, and smaller high-end, high-value commercial refurbishment and fit-out.
Housebuilding and domestic Repair, Maintenance, and Improvement (RMI) have both slowed in the last quarter.
In the brick market, which is often regarded as a good indicator of housing activity, year-on-year sales were +22% higher at the end of Q1, decreasing to +15% at the end of Q2. However, in August, the industry sold 7% fewer bricks than the same month last year.
Many housing developers accelerated build programmes in anticipation of improved market conditions following the Spring Statement and the lowering of interest rates, resulting in a temporary increase in material use. The expected rise in consumer confidence has yet to materialise. With plots left unfinished due to a lack of buyers, demand for key materials has slowed, a trend likely to continue into the early months of 2026.
Additionally, the traditional link between home sales and renovation work appears to have weakened. Despite some improvement in housing transactions, this has not translated into RMI work as it has previously, as consumers remain hesitant to overextend their finances.
Infrastructure projects, such as aviation schemes at Heathrow and Gatwick, along with a growing pipeline of major schemes including prisons and data centres, are progressing, but this cannot fully offset the slowdown in new-build housing.
All parties are stressing the importance of strong supplier relationships to ensure readiness when demand eventually recovers.
Many in the group have emphasised that while the housebuilding and domestic RMI sectors await that recovery, the lack of demand there in the short-term has led those employers – most of whom are SME’s – to curtail hiring and investment in apprentices, unfilled vacancies and up-skilling. Simply put, despite thousands of applicants, employers are not employing in these sectors.
There is therefore a genuine risk of a loss in both capacity and workforce that will lead to a more pronounced shortage in the medium-term, just when a recovering market can least afford it. This will make the Construction Skills Mission Board’s target to achieve an additional 100,000 new recruits per annum into the industry by the end of this parliament that much more challenging.
It is imperative that where demand has been sustained – such as the aforementioned energy generation, energy efficiency, data centres, etc – that employers commit to investing in people, as these sectors are in fact long-term growth opportunities. More widely for the housebuilding and RMI sectors, this group is seeking some kind of demand-side stimulus from the UK government along with a renewed focus on its Warm Homes Plan that has promised a £13 billion investment for five million homes across Britain.
While the industry continues to demonstrate resilience, members agree it is important to increase awareness with government and stakeholders about these challenges — not to criticise, but to encourage meaningful engagement and policy support that can help rebuild confidence, safeguard jobs, and sustain investment across the construction sector.
