Nearly half of respondents to a survey report annual operating expenses have increased by more than £500,000.
A new survey of leaders in the building materials supply chain has revealed the stark impact of the cost of doing business in the sector.
According to the research from the Builders Merchants Federation, 44% of respondents report annual operating expenses have surged by more than £500,000.
The national trade body surveyed owners and senior leaders of businesses within its membership to gauge the economic headwinds being faced.
It reveals that labour costs were considered the most impactful, contributing between 21% and 30% to overall cost increases in the last 12 months.
The survey also found that respondents estimated energy, labour, logistics, finance and interest rates, as well as property and business rates, have collectively led to a cost increase on average of between 11% and 20% over two years.
The impact of costs was also compounded by falling sales as 54% of respondents said sales volumes had decreased over the last two years, with some reporting a drop of more than 10%.
BMF CEO John Newcomb said: “Our Cost of Doing Business survey paints a troubling picture of an industry that is reaching crisis point.
“Sales are down, costs are skyrocketing and survey respondents are telling us that they are cutting back on key investments, making employees redundant and considering closing branches.
“We urgently need to see some action from the Government to get Britain building again, whether that is incentives such as the Freedom To Buy scheme proposed by the Home Builders Federation, and a speedier planning process.”
The results of the survey align with the latest figures from BMF’s monthly Builders Merchants Building Index, which tracks sales data across the construction materials supply chain and is considered to be a key bellwether for the national economic picture.
The most recent figures showed a -10.6% fall in sales volume for February 2026 compared to the same month last year.
The BMF represents 1,020 members with combined sales of £52 billion pounds and employing almost 209,000 staff.
Within the last 12 months alone, the trade body - the fourth largest 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.
Newcomb added: “The current situation is so dire that one of our members, Jewson, part of STARK Building Materials UK, has launched a campaign, supported by the BMF and our members, called Let’s Get Britain Building – Now, which is attempting to collect one million petition signatures in a bid to have these issues discussed in Parliament.
“The Government recognised the need for 1.5 million new homes in Britain within its manifesto.
“Our members are poised to deliver the materials needed to construct those new properties. What we’re asking for is action to get UK construction moving.”
