Trading conditions are on a par with the aftermath of the 2008 market crash in the UK’s building materials sector, according to the BMF (Builders Merchants Federation).
The scale of economic malaise is reflected in a significant level of insolvencies and companies going into administration across the industry.
Within the last 12 months alone, the BMF - the fourth largest trade association in the construction sector - has seen 24 members, with a turnover of £242 million and employing 1,059 staff, go into insolvency. A further five members, with a total turnover of more than £60 million and 129 employees, have entered into administration.
And latest monthly figures from the BMF’s Builders Merchant Building Index (BMBI) show that December saw a 2.5% dip in like-for-like value sales compared to the same month in 2024.
John Newcomb, CEO of the BMF, said: “These are not figures that reflect the government’s manifesto pledge to build 1.5 million homes.
“Feedback from across our sector all points to the fact that trading conditions in building materials are on a par, if not worse, than the fallout from the market crash of 2008.
“The number of insolvencies and companies going into administration in 2025 is almost the same amount as the previous four years combined
“With no green shoots on the horizon, the outlook is dire. Ministers are delivering on rhetoric, but not the change on the ground needed. We’ve been banging the drum to see clear action taken, but the industry as a whole is being met with a blank.
“We need action now, with incentives including help for first time buyers to stimulate the housing market. The planning process also needs to be sped up.
“With more than 75% of products manufactured in the UK, the sector must be protected for the future stability of the nation’s economy.
“Members are working to deliver the building materials needed to create a new generation of homes in the UK, but we urgently need a clear plan from government to give the confidence needed to continue to invest.
“Action needs to be taken to deliver desperately needed homes that are built faster, to higher standards, in the right locations and that people can afford to buy or rent.”
Martin Armour, Commercial Director for Burton ’The Roofing People,’ and BMF Regional Chair for the North and North East, added: “Trading conditions across the building materials sector are on a par with the 2008 crash, with a very real risk that they worsen further unless action is taken.
“Confidence is extremely fragile, driven by prolonged uncertainty and a lack of meaningful intervention to stimulate demand.
“This is not just a new-build issue. The repair, maintenance and improvement market is also slowing, following a period of exceptional activity during Covid that has not returned. With fewer people moving home or entering the housing market, demand is being suppressed across the supply chain.
“If the government is serious about meeting its housing ambitions and supporting regional economies, it must act now to restore confidence, unlock activity and provide the conditions businesses need to invest and grow.”
David Young, CEO of Bradfords Building Supplies, is BMF Regional Chair in the South West of England. He said: “We’ve never seen volumes as low as this. There’s a total silence from government to address the issue.
“There are many headwinds facing the industry. We still have 70,000 homes in the South West waiting to be built, which cannot move forward because of the phosphate and nitrate situation, and National Insurance increases are driving up inflation.
“There are some glimmers of hope, with forward thinking developers making things happen, and we are planning to grow, investing £6 million in the business and opening new branches. But there’s much more to be done to boost building across the UK.”
In Scotland, which has its own house building targets separate to the 1.5 million homes pledged for England, Gordon Banks, a former Labour Shadow Minister and BMF Regional Chair shares similar concerns.
Banks, a director of Fife-headquartered Cartmore Building Supplies, said: “I was in Parliament in 2008 when the crash happened. Immediate action was taken, but this situation now feels like death from a thousand cuts.
“The economic policies do not tie in with the trading environment, which is preventative rather than focused on growth.
“Without a strong building sector, the outlook for the UK overall is bleak, yet it’s the one sector that can drive growth in every part of the economy.
“This is the industry that does the heavy lifting for the UK economy. A buoyant building trade drives confidence and purchases more widely afield, including in the high street.”
James Hipkins, BMF Midlands Regional Chair, of Emery’s Timber and Builders Merchants in Stoke-on-Trent and Telford, added: “It’s the toughest I’ve ever known it, and definitely worse than in 2008.
“The situation is also going on under the radar. It’s more subtle, and that makes it more dangerous in many ways. The government cannot just let it roll along like this.”
