The Builders Merchants Federation (BMF) has revised its outlook for the building materials sector, downgrading its baseline sales forecast for 2026 from growth of 2.3% to a contraction of 1.8%, reflecting continued pressure across residential construction and home improvement markets.
According to the BMF’s Summer 2026 Industry Forecast, a weaker-than-expected start to the year, geopolitical uncertainty, subdued consumer confidence and wider economic challenges have all contributed to a more cautious outlook for the construction supply chain. Poor weather conditions during the opening months of 2026 and the ongoing impact of conflict in the Middle East have further weighed on activity.
The forecast is particularly relevant for businesses operating in the custom and self-build sector, where demand remains closely linked to housing market confidence and discretionary investment in homebuilding and improvement projects.
Building materials used in new-build housing and repair, maintenance and improvement (RMI) work continue to account for the majority of merchants’ sales. However, both sectors have been affected by weaker consumer sentiment, resulting in sustained pressure on demand. At the same time, rising costs are continuing to challenge development viability for housebuilders, with output expected to soften further until there is greater clarity around the economic outlook.
John Newcomb, Chief Executive of the BMF, said: “There is a significant gap between what the Government has proposed and what is being achieved out on the ground.”
He added: “Customer confidence still remains fragile.”
The latest downgrade marks a further deterioration from the BMF’s Winter Forecast published earlier this year, which had already reduced its 2026 growth projection from 3.1% to 2.3% amid concerns over slowing market activity and economic uncertainty.
For self-builders, developers and suppliers, the revised forecast underlines the challenging conditions facing the residential construction market, despite ongoing policy commitments to increase housing delivery. The BMF expects market recovery to remain dependent on improved consumer confidence, stronger housing activity and greater economic stability.
