IN Brief:
- The BMF has downgraded its 2026 baseline forecast from +2.3% to -1.8%.
- The trade body cites geopolitical uncertainty, subdued consumer confidence, and weak economic conditions.
- The downgrade reflects continued pressure on merchants, manufacturers, contractors, and housebuilding supply chains.
The Builders Merchants Federation has downgraded its baseline forecast for 2026, cutting expected growth from +2.3% to -1.8% as the building materials market remains under pressure.
The BMF’s Industry Forecast Summer 2026 points to a more cautious outlook for the construction supply chain, citing geopolitical uncertainty, subdued consumer confidence, and softer economic conditions. The revision marks a significant shift from earlier expectations that 2026 would deliver a more stable recovery for materials sales.
Building products manufacturers, merchants, contractors, and housebuilders continue to face weak demand, inflation risk, and uneven project starts. For merchants, volume weakness can be particularly difficult because fixed costs, branch networks, stockholding, transport, and supplier relationships still need to be maintained even when activity softens.
The wider construction market has been showing the same uneven pattern. Recent ONS data showed construction output edging up while new work fell, with repair and maintenance carrying growth as new-build activity remained subdued.
That split affects the materials supply chain directly. Repair and maintenance can support demand for maintenance materials, tools, finishes, insulation, replacement components, and small project supplies. New-build weakness affects heavier materials, frames, structural products, groundworks packages, roofing, façade systems, and volume supply into housebuilding and commercial schemes.
Cost pressure remains a second challenge. The market has already seen warnings around fresh materials inflation, including building products exposed to energy, freight, and fuel costs. Bricks, plasterboard, insulation, cement-based materials, timber, steel-linked components, and imported products can all move quickly when energy prices, logistics, or global supply chains tighten.
The forecast also reflects the slow transmission between political housing ambition and physical materials demand. A stronger planning policy environment does not immediately create merchant sales. Sites still need viable appraisals, infrastructure funding, building safety approvals, mortgage demand, labour, utilities, and a contractor base prepared to take risk. When those elements move slowly, suppliers that invested for a stronger housebuilding rebound can be left carrying capacity into a weak market.
Contractors will need to maintain procurement discipline in a market that is neither fully weak nor fully recovering. Subdued demand does not automatically create stable prices. Energy, transport, raw materials, exchange rates, and geopolitical risk can still move sharply, while financially stressed suppliers can create availability, credit, and service risks that are not visible in headline material indices.
Merchants also sit close to the health of smaller builders, RMI contractors, and regional construction businesses. If consumer confidence remains weak, domestic improvement work can slow, private clients can defer projects, and smaller contractors can reduce purchasing. Those changes flow quickly through local branches and trade counters.
The BMF downgrade gives a more cautious reading of the next phase of recovery. Stronger activity remains possible when housing, public investment, infrastructure, and private development improve, but the materials market is not yet moving with the confidence many suppliers expected. Until starts become more consistent, the supply chain will remain exposed to thin demand, volatile costs, and cautious purchasing.
