Stagnant Building Materials Market Expected to Continue into 2026

The BMF (Builders Merchants Federation) Winter Forecast Report confirms a stagnant market for building materials sales in the second half of 2025 and does not expect significant growth in the first quarter of 2026.  

After a promising start to the year, Q3 2025 proved challenging for building materials sales, prompting the BMF to lower its 2025 annual growth forecast from 2.5% to 1.4%.

The BMF’s current baseline annual growth forecast for 2026 has also been downgraded - from 3.1% to 2.3%.  Continued economic uncertainty means the latest Forecast is tempered by lower and upper forecast scenarios of 1.2% and 3.7% - the latter requiring government stimulus to reignite key market areas, including housebuilding and domestic RMI. 

The BMF Forecast combines a comprehensive analysis of merchant market performance, drawn from the Builders Merchants Building Index, regarded as the key indicator of current RMI activity, with an examination of key factors affecting builders’ merchants to project future sales.

The second-half downturn in 2025 was not entirely unexpected, as several activity measures signalled a slowdown in market activity.  With GDP growth subdued at 0.1%, both consumer and business confidence were under pressure.  

London, typically one of the strongest regions, has now become one of the weakest as large, expensive projects stall and developers and contractors reduce their exposure. Meanwhile, the West Midlands and North East have performed relatively well, generally maintaining their levels of direct sales. 

John Newcomb, CEO of the BMF, said:  

“Following a glimmer of growth in building material sales in the first six months of the year, the positive trend stalled, and the forecasted turnaround for the third quarter of the year failed to materialise. In particular, the housing market slowed in the third quarter, with housebuilders adopting a cautious approach ahead of the Autumn Budget, which ultimately fell short of delivering the stimulus required to reignite the housing market. 

“In addition, both housing RMI and the new housing market – key areas for builders’ merchant sales – have been negatively impacted by the continued fall in consumer confidence.  The Bank of England could help to unlock these markets in 2026 by supporting a significant reduction in interest rates.  

“However, Government intervention is needed to really get these sectors moving. We need to see incentives for first-time buyers, delivery of the Social and Affordable Housing Programme, more action to free up brownfield land, as well as the publication of the long-awaited Warm Homes Plan and Future Homes Standard.”

<!--StartFragment-->The BMF Winter Forecast Report is available by emailing Andrei.Imbru@bmf.org.uk<!--EndFragment-->

Source : BMF

Image : Ground Picture / shutterstock / 403530016 

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