The Builders Merchants Federation (BMF) has warned that trading conditions across the UK building materials sector are now comparable to – and in some cases worse than – the aftermath of the 2008 financial crash. For professionals operating within the sector, the latest figures highlight a prolonged period of suppressed demand, fragile confidence and increasing structural risk across the supply chain.
Over the past 12 months, 24 BMF members – representing a combined turnover of £242 million and employing 1,059 people – have entered insolvency. A further five members, with turnover exceeding £60 million and 129 employees, have gone into administration. The federation notes that insolvency levels recorded in 2025 are almost equivalent to the previous four years combined, underlining the depth and speed of decline.
Data from the Builders Merchant Building Index (BMBI) reinforces this downturn, with December reporting a 2.5% drop in like-for-like value sales compared with December 2024. For merchants, manufacturers and suppliers already contending with inflationary pressures, labour cost increases and constrained project pipelines, these figures confirm that recovery remains elusive.
BMF CEO John Newcomb argues that current market realities sit in stark contrast to the government’s ambition to deliver 1.5 million new homes. The federation is calling for tangible stimulus measures, including support for first-time buyers and accelerated planning reform, to unlock housing activity and restore business confidence. With more than 75% of building materials manufactured domestically, the sector’s stability is closely tied to wider UK economic performance.
Regional voices echo these concerns. Martin Armour of Burton Roofing Merchants highlights that both new-build and RMI markets are slowing, with reduced home moves suppressing demand across the supply chain. In the South West, David Young of Bradfords Building Supplies reports historically low volumes and significant delays to 70,000 homes due to phosphate and nitrate constraints, alongside rising employment costs. In Scotland, Gordon Banks of Cartmore Building Supplies describes the situation as a gradual erosion of confidence rather than a single shock event, warning of broader economic consequences if construction remains subdued.
From a sector standpoint, the pressing questions are clear:
- What immediate fiscal or policy levers can government pull to stimulate housing demand?
- How can planning reform be accelerated to unlock stalled developments?
- What targeted incentives would encourage first-time buyers back into the market?
- How can regional supply chains be protected while confidence remains fragile?
- What collaborative action can merchants, manufacturers and trade bodies take to prevent further insolvencies?
From a commercial point of view, standing still isn’t an option. When the market is tough, the companies that stay visible are the ones that come out stronger.
Businesses should be asking themselves:
- Are we still getting in front of customers while others go quiet?
- Are we clearly showing why we’re worth buying from — not just competing on price?
- Are we giving our branch teams the right tools and information to sell with confidence?
- Are we focusing on the parts of the market that are still active, like repairs, maintenance and specialist products?
The BMF’s warning that conditions could be “worse than 2008” isn’t just economic commentary. It’s a signal to rethink how we communicate. Instead of pushing big growth messages, the focus should shift to building trust, protecting margins and strengthening partnerships.
When confidence is low, simple, clear communication and strong relationships matter more than ever. Staying visible and reminding customers you’re there to support them can make a real difference.
