The first report of the year from the Construction Leadership Council’s (CLC) Material Supply Chain Group is a bleak assessment of market prospects in the absence of urgent action to stimulate demand.
John Newcomb, CEO of the Builders Merchants Federation and Peter Caplehorn, CEO of the Construction Products Association, are co-chairs of the Material Supply Chain Group.
The group says the UK construction industry continues to face significant challenges, as evidenced by a sharp decline in output in the final quarter of 2025. While the UK economy grew by 0.3% in November, construction output fell by 1.3%.
Concrete orders serve as a good indicator of construction activity. Volumes nationally have decreased by around 28% over the past four years. London, usually the busiest market, has experienced a 39% decline in the last two years.
The group reports no notable product availability issues, with brick manufacturers holding large stock levels and reassessing how much production to maintain.
“Elsewhere, major manufacturers are making decisions based on current volumes,” it said.
“As a result, for those starting from a low base, it will take up to six months for production capacity to adjust if demand significantly improves.
“Where the prolonged weakness in demand has forced producers to reshape their business by mothballing sites, delaying investment, or making redundancies, restarting capacity is neither quick nor straightforward. The longer the market remains stagnant, the concern shifts from near-term impacts to longer-term consequences and risks.
The group blamed delayed investment decisions, increased client caution, ongoing economic volatility, and a lack of consumer confidence for the notable drop in new orders.
“Timing presents another challenge,” it said.
“Although some major projects have technically commenced, the physical build phase lags behind the planning and agreement stages. The significant extension of PCSA periods across many schemes is especially worrying for major contractors, where longer timelines mean projects take more time to complete, delaying revenues.”
Despite the progress of large infrastructure schemes, including the prison programme, the group said sustained recovery will depend heavily on renewed investment in new homes and residential RMI.
The group says targeted stimulus measures are “now essential” to restore momentum, support job creation, and unlock latent demand for materials and labour.
