BMF downgrades building materials sales forecast for 2026

The Builders Merchants Federation (BMF) has downgraded its baseline forecast for 2026 from +2.3% to -1.8%, citing geopolitical uncertainty, subdued consumer confidence and weak economic conditions as reasons for the change.

The BMF Industry Forecast Summer 2026 outlines a range of factors contributing to a more cautious outlook for the construction supply chain, which include the much weaker-than-anticipated start to the year due to poor weather, compounded by the ongoing effects of conflict in the Middle East.

Building materials for new housing and home improvement projects have both been adversely affected by subdued consumer confidence, which has weakened demand over a sustained period. With housebuilders also facing increased costs that are exacerbating site viability, output is expected to fall further in 2026 as they await greater certainty about the economic outlook.

John Newcomb, CEO of the BMF, said: “The UK experienced the largest downgrade in growth expectations among the G 7 economies in the International Monetary Fund’s (IMF) latest GDP forecasts. The labour market has also softened in recent months, further eroding confidence amongst UK consumers and businesses.

“It comes as no surprise that businesses are growing more cautious. Recent activity indicators point to a sector that continues to struggle to gain momentum, with weaker workloads, delayed project starts and ongoing concerns about future demand.

“For the building materials sector, these conditions have created a challenging trading environment. Demand has remained under pressure across several key product categories, particularly those linked to new housing activity, where the rising cost of materials is outpacing UK inflation.”

The BMF Forecast combines a comprehensive analysis of merchant market performance, drawn from its Builders Merchants Building Index, produced monthly and regarded as the key indicator of current RMI activity, with an examination of key factors affecting builders’ merchants to project future sales.

The BMF Industry Forecast Summer 2026 is available by emailing Andrei.Imbru@bmf.org.uk