The UK building materials supply chain is facing significant cost and demand pressures, according to new research from the Builders Merchants Federation (BMF), which points to rising operating costs and declining sales volumes across the sector.
The survey of owners and senior leaders within BMF member businesses found that 44% reported annual operating costs had increased by more than £500,000, highlighting sustained inflationary pressure across core business areas.
Rising operating costs across labour, energy and logistics
Respondents identified labour costs as the most significant driver of rising expenses, contributing an estimated 21% to 30% of overall cost increases over the past 12 months.
Energy, logistics, finance, interest rates, property costs and business rates were also cited as key factors, with businesses reporting combined cost increases of between 11% and 20% over the past two years.
Falling sales volumes adding further pressure
Alongside rising costs, more than half of respondents (54%) reported a decline in sales volumes over the last two years, with some experiencing reductions of more than 10%.
The BMF said the combination of reduced demand and higher operating costs is placing increasing strain on supply chain businesses, with reported impacts including reduced investment, workforce reductions and branch closures.
Sector warning over financial stability
BMF chief executive John Newcomb said the findings indicate significant financial pressure across the sector.
He 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.”
Market conditions reflected in industry index
The survey results align with the Builders Merchants Building Index (BMBI), which tracks sales performance across the construction materials supply chain.
The most recent figures show a 10.6% year-on-year fall in sales volumes for February 2026, reinforcing the downward trend reported by industry respondents.
Insolvency and restructuring pressures in the sector
The BMF, which represents more than 1,020 member businesses with combined sales of £52 billion and around 209,000 employees, also highlighted ongoing financial stress within the sector.
Over the past 12 months, 24 member businesses have entered insolvency, alongside a further five entering administration, collectively affecting more than £300 million in turnover and over 1,100 employees.
Calls for government action to support construction demand
John Newcomb added that industry initiatives are being launched in response to current conditions, including a campaign led by Jewson, part of STARK Building Materials UK, supported by the BMF and members, calling for increased focus on construction activity.
He said: “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.”
