Building materials sector facing ‘death from a thousand cuts’

The UK’s building materials sector is facing “death from a thousand cuts”, a Scottish industry leader has warned, amid a call for urgent action to meet new home targets.

Experts have warned that trading conditions are on a par with the aftermath of the 2008 market crash in Britain’s building materials sector.

Trade body the BMF (Builders Merchants Federation) said the scale of economic malaise was reflected in a “significant” level of insolvencies and companies going into administration across the sector.

Governments on both sides of the Border have been looking to ramp up the pace of new home building.

Within the last 12 months, the BMF - the fourth largest trade association in the construction sector - has seen 24 members, with a collective turnover of £242 million and employing 1,059 staff, go into insolvency. A further five members, with a total turnover of more than £60m and 129 employees, have entered into administration.

John Newcomb, chief executive of the BMF, said: “Feedback from across our sector all points to the fact that trading conditions in building materials are on a par, if not worse, than the fallout from the market crash of 2008.

“With no green shoots on the horizon, the outlook is dire. Ministers are delivering on rhetoric, but not the change on the ground needed.

“We need action now, with incentives including help for first-time buyers to stimulate the housing market. The planning process also needs to be sped up.”

In Scotland, which has its own housebuilding targets separate to the 1.5 million homes pledged for England, Gordon Banks, a former Labour shadow minister and BMF regional chairman, said: “I was in Parliament in 2008 when the crash happened. Immediate action was taken, but this situation now feels like death from a thousand cuts.

“The economic policies do not tie in with the trading environment, which is preventative rather than focused on growth.”

Banks, a director of Fife-headquartered Cartmore Building Supplies, added: “Without a strong building sector, the outlook for the UK overall is bleak, yet it’s the one sector that can drive growth in every part of the economy.

“This is the industry that does the heavy lifting for the UK economy. A buoyant building trade drives confidence and purchases more widely afield, including in the high street.”