The UK construction materials sector continues to navigate one of the most challenging trading environments in over a decade, according to the latest Material Supply Chain Group statement from John Newcomb, CEO of the Builders Merchants Federation, and Peter Caplehorn, CEO of the Construction Products Association. Both leaders, co-chairs of the Construction Leadership Council’s (CLC) Material Supply Chain Group, have warned that while product availability remains largely stable, the broader construction market shows little sign of recovery before 2026.
Persistent weakness in construction demand
Throughout the third quarter of 2025, the industry has seen flat or declining sales of building materials compared to last year. While isolated shortages in metalwork, concrete tiles, coatings, and plain tiles persist—mainly due to manufacturing issues—most materials are available and prices remain steady in a stagnant marketplace.
However, the underlying concern is clear: construction demand remains weak, and confidence across the supply chain is subdued. The Group notes that sustained pressure on margins and declining workloads have created significant financial challenges, particularly for SMEs in construction supply chains, many of which are cutting back on hiring, training, and investment.
Key construction sectors feeling the strain
The slowdown is most evident in housebuilding and domestic repair, maintenance and improvement (RMI) work. The brick market, a reliable indicator of housing activity, highlights this trend. After a strong start to the year, with brick sales 22% higher year-on-year at the end of Q1, the growth rate dropped to 15% in Q2, before turning negative in August, when sales fell 7% compared with the same month in 2024.
Developers had accelerated build programmes earlier in the year in anticipation of market improvement following the Spring Statement and falling interest rates. Yet, the expected consumer confidence boost never materialised, leaving many housing plots incomplete and demand for core building materials slowing once again.
Interestingly, the traditional correlation between home sales and renovation work has also weakened. Despite modest improvement in housing transactions, RMI activity has not followed suit as homeowners remain cautious about spending amid broader economic uncertainty.
Growth opportunities in energy and infrastructure
While residential construction struggles, certain areas continue to show promise. The Group highlights energy generation and efficiency, including solar PV, heat pumps, and data centres, as resilient growth segments. Large-scale infrastructure projects such as Heathrow and Gatwick airport schemes, as well as new prisons and commercial refurbishments, are progressing, though these cannot yet offset the overall downturn in new housing development.
Risk to future capacity and skills
The report warns of a concerning skills gap emerging due to reduced hiring and investment. Thousands of applicants remain unplaced as SMEs in housebuilding and RMI limit recruitment and apprenticeship opportunities. This contraction risks creating a medium-term capacity shortage, just as the Construction Skills Mission Board aims to deliver an additional 100,000 recruits per year by the end of this Parliament.
To counteract this, employers in sectors with sustained demand,particularly in low-carbon technologies and digital infrastructure, are being urged to invest in workforce development and construction skills training to secure long-term resilience.
Call for policy support and demand-side stimulus
The Material Supply Chain Group stresses the importance of collaboration between industry and government. A renewed focus on the UK’s Warm Homes Plan, which promises £13 billion in funding to retrofit five million homes, could help stimulate demand in the short to medium term.
Ultimately, the message from the Group is one of resilience and readiness: while the construction industry continues to withstand significant headwinds, strategic government engagement, targeted investment, and proactive workforce planning will be essential to rebuild confidence, protect jobs, and position the sector for sustainable recovery by 2026.
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