The BMF Winter Forecast 2025 paints a sobering but realistic picture for the builders’ merchant sector. After early signs of recovery, momentum stalled in the second half of the year, with Q3 sales flat and confidence continuing to weaken.
While volumes have held up, widespread price deflation has eroded value, particularly in Heavy Building Materials.
Market conditions remain uneven. London has underperformed as large projects stall, while regions such as the West Midlands and North East have shown greater resilience. Encouragingly, sectors aligned to sustainability and essential investment – such as Renewables & Water Management, Services, Timber & Joinery and Landscaping – continue to outperform the wider market.
Looking ahead, growth is expected to remain modest, with a baseline forecast of 1.4% for 2025 and gradual improvement into 2026. Any meaningful recovery is likely to depend on improved confidence, lower interest rates and clearer government support for housing and infrastructure. For merchants and suppliers, adaptability, margin discipline and targeted growth will be key.
Key Forecast Highlights
Merchant & Supplier Perspective
- Market conditions remain challenging: The expected 2025 recovery stalled in Q3, with overall merchant sales value flat (-0.1%) and growth driven mainly by price deflation rather than demand.
- Cautious outlook into 2026: Baseline growth for 2025 revised down to +1.4%, with modest improvement forecast for 2026 (+2.3%) and recovery skewed to H2.
- Volume over value: Volume growth continues, but widespread price deflation—especially in Heavy Building Materials—is eroding margins.
- Category divergence:
- Outperformers: Renewables & Water Management, Services, Timber & Joinery, Landscaping.
- Underperformers: Heavy Building Materials, Decorating, Workwear & Safetywear.
- Regional volatility: London has shifted from a traditional growth engine to one of the weakest regions, while the West Midlands and North East are comparatively resilient.
- Confidence is the biggest constraint: Weak consumer sentiment, delayed projects, and uncertainty around government policy are suppressing demand.
- Opportunities remain in sustainability-led categories, social housing, refurbishment, and service-based revenue models.
Outlook
- 2026 remains challenging but with gradual improvement expected in H2, potentially supported by interest rate cuts.
- Cautious stock management, tighter ranging, and focus on growth sub-sectors are essential.
Agency53 Perspective – How We Add Value
For me the BMF Winter Forecast reinforces the need for focused, commercially driven marketing in a market defined by caution, margin pressure and selective growth. For merchants and suppliers, success will come from clarity, differentiation and smarter engagement rather than volume alone.
Through Brand Identity & Creative Design, we help businesses sharpen their positioning, clearly communicating reliability, sustainability and expertise – key decision drivers in a deflationary environment. A strong, consistent brand builds confidence at a time when customers are increasingly risk-averse.
Our Customer & Audience Activation approach ensures marketing investment is targeted where demand still exists – whether by region, sector or product category – supporting sales teams with campaigns aligned to high-performing areas such as renewables, services and refurbishment.
Finally, Content & Digital Engagement plays a critical role in influencing cautious buyers. Insight-led content, practical tools and strong digital platforms help merchants and suppliers stay visible, relevant and credible throughout longer decision cycles.
By combining sector insight with creative execution and performance-focused activation, we help clients protect share now and accelerate growth as confidence returns.
