Government action needed to tackle malaise in building materials market

​​​​​​​Potential risks to the UK economy have been revealed in new sales data for the building materials sector

The latest BMBI report from the BMF (Builders Merchants Federation) indicates a stalled recovery, stagnant consumer spending, and significant regional disparities in a market regarded as a key economic indicator.

Topline figures reveal two consecutive quarters of value growth of only +1.9% for the first six months of 2025 compared to the first half of 2024, driven by increased volume (+4.0%), as prices were down by -2.0%. 

John Newcomb, CEO of the national trade body, says immediate intervention is now needed to thwart long-term stagnation.

He said: “While these figures confirm sales growth for the second successive quarter, following two years of consistent declines, the outlook is far from certain. 

“Over the last two years, a pattern of inactivity has emerged, a concern not only to this market sector, but to the broader UK economy.

“The issue is compounded by the fact that while market volumes have been boosted by the dry and hot spring season, which led to an extension of decent weather into the summer, sales values have been lacklustre due to the deflationary environment we are currently experiencing.

“Everyone is waiting for the confidence to commit to new projects, but interest rates, mortgage costs, and economic uncertainty have frozen consumer activity.

“People aren’t spending, and currently, nothing is happening that will kickstart the market.

“There are no incentives to buy or move home, while the cost-of-living crisis means that, increasingly, consumers are saving for emergencies rather than bigger investments in their properties.”

The BMF is calling for Government intervention to kick-start consumer spending, drive demand, improve housing stock, and balance out the pattern of regional differences emerging across the UK.

The BMBI uses NiQ GfK’s point of sale tracking data to monitor merchant sales across the country. It is considered a key indicator for the UK’s overall economic picture, tracking national trends and regional variances.

Figures from the latest BMBI report follow the July S&P Global UK Construction Purchasing Index (PMI) survey data, which revealed that UK construction activity had fallen at its sharpest rate in over five years.