The Construction Leadership Council’s (CLC) Material Supply Chain Group has published an update on the current state of the construction materials supply chain.
According to John Newcomb, CEO of the Builders Merchants Federation, and Peter Caplehorn, CEO of the Construction Products Association, who co-chair the CLC’s Material Supply Chain Group, most construction materials remain readily available.
However, this availability reflects subdued demand, with supply conditions remaining favourable largely because fewer contractors and developers are placing orders.
Housing remains the biggest challenge
The statement noted that construction output increased by 1.6% in the three months to April, but ongoing market pressures mean output is forecast to decline by 2% to 2.5% for the remainder of 2026.
The main factor behind this outlook is the housing sector, where demand for new homes remains weak as consumer confidence remains cautious and mortgage approvals continue to fall both year on year and month on month.
While infrastructure continues to maintain a strong pipeline, with highway maintenance and repair activity remaining resilient and growth continuing in data centres and digital infrastructure, the ongoing weakness in housing is outweighing progress in these areas.
Housing typically drives significant demand for key materials including bricks, cement and steel. However, with new home demand remaining subdued, demand for these materials has also fallen. The sector also continues to face uncertainty, with several new regulations, although introduced with positive intentions, potentially adding further costs, complexity and administrative pressures to projects.
New steel tariffs and quotas are also emerging as a concern, with tariff-free import quotas halved, import duties increased to 50% and growing industry concerns over potential product shortages.
Housebuilding activity remains subdued
Despite the government’s ambition to deliver 1.5 million new homes during this Parliament, housebuilding levels have shown limited growth and continue to trend downward. Figures published by the National House Building Council (NHBC) in May showed that 26,959 new homes were registered for construction in Q1 2026, representing a 6% year-on-year decline compared with Q1 2025.
Daniel Pearce, corporate strategy director at NHBC, said: “Our latest figures indicate house builders are taking a cautious approach to registering new plots as fragile consumer confidence, affordability challenges and global economic uncertainty continue to impact demand.
“It’s a perfect storm – the market is subdued, mortgage rates are rising and cost pressures on households are in full effect, exacerbated by geopolitics and recent conflicts. Resolving affordability challenges for homebuyers remains the key to unlocking demand. The market is crying out for some targeted stimulus, such as a new buyer incentive, to help those who need it most get on the housing ladder.
“At present, there is little incentive for developers to accelerate building. Easing certain regulatory requirements, at a time when other costs are rising beyond their control, is a lever that could be pulled to support home builders, particularly SMEs. Accelerating planning reforms is also crucial to help house builders deliver high-quality new homes at volume. The impact of the recent planning changes has yet to be felt.”
