NEWS EXTRA: NMBS CONFERENCE 2026
those improvements, although Williams stressed that the focus is on practical applications rather than technology for its own sake. “When I talk about automation and AI, I mean practical process automation and digital workflows,” he said. “They can verify queries, process information, create insights and flag anomalies. If nothing else, they stop someone keying the same information three or four times.”
Despite the increased use of automation, Williams said people would remain central to the business.
“The human role remains. In fact, it gets sharper,” he said. “People still own the relationships, the judgement, the decisions and the exceptions.” A major part of NMBS’s future strategy will be the development of data and insight capabilities. Williams said the organisation is uniquely positioned to analyse trading activity across the merchanting sector and provide valuable intelligence to both suppliers and members. “We see supplier-to-merchant trading patterns. We see when demand is changing and when categories are growing,” he said. “We see opportunities by region, merchant type and product. We don’t see everything, but what we do see is valuable because it helps people make better decisions.”
Williams also highlighted the importance of Data Yard in strengthening product information and supporting areas such as regulation, procurement, digital trading and sustainability. “Data Yard isn’t just about product information,” he said. “It’s about how we make our trading platform more scalable and more trusted. This is not about making NMBS everything to everyone,” he said. “It’s about doing what we are uniquely placed to do, using our scale, trust, financial resilience, data and industry collaboration to help make trade work better.” He added: “My commitment is simple: to protect the strengths that made NMBS matter and invest in the capabilities that will make it more useful. Our next chapter is to help this sector trade better.” BMJ
ON THE plus side, it wasn’t as pessimistic as some had feared it would be. That said, Francis warned that rising costs, weakening confidence and geopolitical uncertainty will weigh heavily on construction activity over the next 18 months. He said the CPA’s role is to cut through the noise created by headlines and focus on underlying trends. While UK GDP fell by 0.1% in April, the margin of error on GDP estimates means the figure should not be over-interpreted. Overall, the economy has been “bumbling along” since the recovery from the pandemic, with GDP growth of 1.1% in 2024 and around 1.3% in 2025. The CPA forecasts growth slowing to 0.5% in 2026 and 0.9% in 2027, well below the UK’s long-term average of 2%. A major concern is the impact of the latest Middle Eastern conflict, which Francis said is the sixth major global disruption in as many years, adding that higher energy and oil prices will feed through into the wider economy during the second half of 2026 and into early 2027.
The CPA expects inflation to spike later this year, leading to higher interest rates rather than rate cuts.
The labour market is also weakening, he explained. Unemployment reached 5.0% in the year to March, up from 4.6% a year earlier, none of it helped by rising employment costs, including increases in employers’ National Insurance contributions and a National Living Wage that is now 63% higher than five years ago. “What the government did at the end of November was pencil in tax rises for the end of this Parliament. In effect, they took a bet that if growth and tax revenues this year and next
October 2023
www.buildersmerchantsjournal.net July 2026
www.buildersmerchantsjournal.net CHALLENGING CONDITIONS ABOUND
There isn’t a lot of light coming through the economic tunnel, judging by the presentation from Construction Products Association’s economics director Dr Noble Francis.
year were better than expected, then they could triumphantly state, thanks to our great fiscal management, we don’t need to do these tax rises anymore,” he said. “They’ve lost that bet already. So, what that means is coming into this autumn budget or the autumn budget next year, they will have to increase taxes again, cut spending or both.” The CPA forecasts total construction output to fall by 2.5% in 2026, with industry output already 1.5% lower year- on-year in the first four months of the year.
Francis described conditions for housebuilders as a “perfect storm” of weaker demand, rising costs and regulatory pressures. Private housebuilding is forecast to decline by 7% in 2026. While activity improved during the spring, developers now face a combination of weaker demand, rising mortgage rates and increasing construction costs. Mortgage rates have risen since the outbreak of the Middle Eastern conflict, further affecting affordability. At the same time, developers face delays linked to building safety regulation and increasing compliance costs: nutrient neutrality requirements, biodiversity net gain obligations and future regulatory changes. Housing RMI remains subdued as homeowners prioritise saving rather than discretionary spending, although Francis did say that there are some niches, including heat pumps and solar PV installations, which are expected to continue to beat the wider market. There were some areas for better news though. He pointed out that public non-housing construction, including schools, hospitals, prisons and defence projects, should see growth as government capital spending
increases, allbeit slowly. Data centres are also a major growth area, with investment expected to quadruple over the next five years.
The CPA expects significant cost pressures to emerge across the construction supply chain. Oil-based products, including asphalt, paints, adhesives, insulation and plastics, have already seen double-digit price increases, and energy-intensive products such as bricks, concrete, steel and glass are also facing huge inflationary pressures. Further increases are expected throughout the second half of the year.
Additional cost pressures include a new 50% tariff on imported steel, the forthcoming Building Safety Levy and implementation of the Future Homes Standard. Francis warned that confidence remains one of the biggest risks facing the industry. “Homeowners, buyers, businesses and investors are adopting a wait-and-see approach while borrowing costs and construction inflation remain uncertain. Although the first half of 2027 is expected to remain difficult, we forecast a gradual recovery during the second half as inflation eases and confidence improves.”
He finished with a warning that businesses should not assume a return to stability. “There will be further major disruptions. We just won’t be able to predict what they are. The key risks are those cost rises. We are coming from a high cost base already. I’m always grumpy about government ability to do anything well, this one or the previous one. But it could be a positive as well if you’re more optimistic than I am. If government stimulates things that actually benefit the sector, we could see some improvement.” BMJ
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