Product availability remains good across most building materials, according to the latest update from the Materials Supply Chain Group.
However, this seemingly positive situation reflects subdued demand in a market characterised by three interrelated challenges: higher input costs, weak consumer confidence and ongoing economic and political uncertainty.
Although official figures indicate that construction output grew by 1.6% in the three months to April, pointing to modest growth in construction activity, this has not yet been reflected in builders’ merchants’ sales or industry forecasts, which suggest the sector will decline by between 2% and 2.5% in 2026.
The biggest concern remains housing. Demand for new homes is slowing as consumers become more cautious, with mortgage approvals down on both a year-on-year and a month-on-month basis.
While there is a significant pipeline of infrastructure work, a substantial programme of highway maintenance and repair, and growth in data centres and digital infrastructure, this is not enough to offset the continued weakness in housing, which generates the greatest demand for materials such as bricks, cement and steel.
Further pressure on housebuilding is mounting as the number of regulations increases. While many regulations are well-intentioned, they risk adding cost, complexity and extra administration without delivering the expected benefits.
The latest 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, said: “Across the supply chain, businesses continue to report rising costs.
“Although the pace of manufacturers’ price increases has slowed, many previously announced increases are still feeding through the market. In addition, surcharges stemming from higher fuel and energy costs, introduced as a result of the Middle East conflict, have not yet been reversed. It now seems likely that the full impact of this disruption has not yet reached the industry and will be felt later in the year.
“The Group’s last statement (28 April) noted the Government’s commitment to work with the Construction Leadership Council to review proposals on UK steel tariffs and quotas. On the 1 July 2026 the Government implemented its new steel tariffs and quotas trade measure whereby tariff-free quotas have been halved and duties on steel UK imports increased to 50 per cent. However, concerns remain about the impact of the quotas on construction and its supply chain. Early indications suggest that UK access to certain steel products could be significantly reduced. The work of the CLC on this is ongoing, and industry bodies are seeking a review process to address any emerging issues.
“The recent change in political leadership has added another layer of uncertainty at a time when businesses are already navigating a challenging economic environment. The Group believes that early clarity on housing, planning and infrastructure priorities will be important for restoring confidence across the construction supply chain.
“The Group continues to encourage early engagement and clear communication throughout the construction supply chain. Greater transparency on pricing, improved policy certainty and continued collaboration between industry and Government will be essential to support confidence, investment and a sustainable recovery in construction activity.”
