Construction industry ‘not expected to recover’ in 2025, building supplier Lords says
The UK construction industry is unlikely to recover before the end of the year, one of Britain’s biggest building materials suppliers has said, as firms wrestle with rising taxes and increased uncertainty.
London-listed Lords said it was continuing to focus on delivering efficiencies to deal with cost pressures and “an increasingly onerous regulatory environment” after it reported a downturn in demand.
“The economic environment at the start of 2025 is not conducive to growth,” Lords said.
“Like all UK businesses, we also face increased costs in 2025 in relation to employer’s National Insurance, business rates and the minimum wage, which amount to around £1m for us annually.
“There are signs of an improving construction market, which should support an improvement in the repair, maintenance and improvement sector, but this is not generally expected before the end of 2025.”
Lords today reported a 5.6 per cent decline in turnover for calendar year 2024, down to £436.7m.
The London-based business, which operates from more than 40 sites across the UK, swung to a £2.6m loss for the year, down from a £3m profit the previous year, while net debt rose 13.5 per cent to £32.4m.
The 40-year old firm also said it expected to take a £1m knock from rises to national insurance contributions and the national minimum wage.
But the company said its new renewables division saw sales up 99 per cent to £5.5m, supported by the acquisition of Ultimate Renewables Supplies in October 2024.
Lords shares rose 5.5 per cent to 29p by mid-morning trade.
Rising insolvencies
Lords’ remarks come as construction business insolvencies increased to their highest-ever level as a barrage of rising costs continues to squeeze many in the sector to the point of collapse.
As many as 840 construction firms appointed liquidators or administrators in the first four months of the year, a City PM analysis of corporate filings found, an increase of more than five per cent compared to last year and a near-doubling compared to typical pre-pandemic levels.
The latest data published by the Insolvency Service showed the sector continued to be the hardest-hit for insolvencies, accounting for 19.5% of all UK company failure in February, a jump of around three percentage points compared to last year and the highest share in three years.