Impact of flatlining housing activity is hiring freeze in sector, group adds
The Construction Leadership Council has warned that no significant recovery of building materials sales is expected until next year.
In a gloomy update, the body’s material supply chain group said: “The past few months have experienced persistent pressures across the supply chain.
“The consensus within the group is that this remains one of the most challenging trading environments in over 10 years, characterised by sustained weakness in demand, margin pressures, and limited signs of recovery.”
The update, authored by John Newcomb, chief executive of the Builders Merchants Federation and Peter Caplehorn, chief executive of the Construction Products Association, added: “Many businesses are facing short-term financial difficulties and decreased confidence, with forecasts suggesting that the market as a whole is expected to remain essentially flat in the near future.”
It said there were “small pockets of growth” such as energy generation, data centres, and smaller high-end, high-value commercial refurbishment and fit-out but added that the core housing and RMI sectors were on the wane.
“Many housing developers accelerated build programmes in anticipation of improved market conditions following the Spring Statement and the lowering of interest rates, resulting in a temporary increase in material use. The expected rise in consumer confidence has yet to materialise. With plots left unfinished due to a lack of buyers, demand for key materials has slowed.”
It said that despite an initial surge in brick sales which saw year-on-year sales up 22% at the end of Q1 on the same period last year, this was short-lived with sales in August down 7% on the same month in 2024.
And it said the knock-on impact was a hiring freeze among housebuilders. “The lack of demand there in the short-term has led those employers – most of whom are SME’s – to curtail hiring and investment in apprentices, unfilled vacancies and up-skilling. Simply put, despite thousands of applicants, employers are not employing in these sectors.”
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