BMBI Experts assess the impact of the US-Iran war on merchants’ sales
The latest BMBI merchant sales figures reflect the impact the Iran war has had on the UK market, with Q1 2026 like-for-like value sales down -3.2% compared to Q1 2025 and like-for-like volume sales tumbling -8.1%.
It wouldn’t be right to blame the Iran war for all the industry’s woes. According to the BMBI industry experts, many factors are in play, from falling business and consumer confidence to rising fuel and raw material costs, but the war is a serious blow to hopes of an early recovery as the conflict affects almost every part of the UK’s building supply chain. Yet, pockets of potential growth and opportunities remain:
Neil Hargreaves, Knauf Insulation, the BMBI Expert for Mineral Wool Insulation: Our industry is no stranger to disruption. Covid, the Ukraine war and the Ever Given blockage have all stretched supply chains in recent years. The situation in Iran has once again triggered an unwelcome oil price shock.
We’re fortunate the resulting energy price spike has arrived in the spring, when many households are switching off the thermostat. But with long-term effects predicted, it’s an acute reminder of the critical importance of insulation. Not just for net zero, but for managing the cost of living and ensuring energy security. Better insulation is a national priority.
Paul Haynes, Baxi, the BMBI Expert for Heating and Hot Water Solutions: Disruption to global energy flows in Q1, including closure of the Strait of Hormuz, drove sharp increases in kerosene and heating oil prices (up to x3), disproportionately impacting off‑grid households and further strengthening the long‑term case for electrification. Oil boiler users have had to accept significant and rapid price increases in the cost of oil. These, almost always off-grid properties, should be prime targets to move to heat pumps, but the problem of skilled installers in often remote locations is amplified.
Andy Simpson, Heidelberg Materials, the BMBI Expert for Cement and Aggregates: The war is having a huge impact on the market and customers. We are trying to keep price increases to a minimum, but rising oil prices affects everything from operational and transport costs to the price of packaging. For customers, elevated energy costs and market uncertainty is denting business confidence and some major projects, including the OpenAI Stargate project, are being shelved until conditions improve.
James Davenport, Metsä, the BMBI Expert for Softwoods and Engineered Wood: March brought further uncertainty with the conflict in Iran, and wider geopolitical and economic pressures compounding existing challenges around fuel, energy, borrowing costs, and consumer confidence. These factors are shaping activity in the housebuilding sector, prompting the Construction Products Association (CPA) to revise down its 2026 outlook. Against this backdrop, customers continue to manage stock carefully and seek value from their supply base. This is reflected in purchasing decisions, for example, forward sales of sawn timber products shifting towards landed ‘quay stocks’ as businesses seek greater flexibility in an uncertain market.
Derrick McFarland, Keystone Lintels, the BMBI Expert for Steel Lintels: The first quarter has been busy for the government, with the US-Iran war and inflationary cost uplifts to businesses. While interest rates were held at 3.75% the Bank of England warned the UK needs to brace for rate hikes later this year. Higher inflation is unavoidable. Despite this pause in interest rate hikes, mortgage rates forecasts are dependent on geopolitics today.
Jim Blanthorne, Keylite, the BMBI Expert for Roof Windows: The US-Iran conflict has unavoidably accelerated cost price inflation in transport and in materials such as PVC profiles, aluminium and glass, which are highly impacted by oil prices. An exceptional price increase in the second half of the year will be necessary for Keylite but will be kept to a minimum as we recognise the impact rising prices have on construction activity.
Chris Aitken, ECI, the BMBI Expert for Website and Product Data Management Solutions: The war in the Middle East is seriously weakening the economy and interrupting global supply chains, and the Construction Products Association has downgraded its 2026 forecast to -2.5% contraction in construction activity with private housebuilding and RMI most affected.
Krystal Williams, Pavestone, the BMBI Expert for Natural Stone and Porcelain Paving: Indian porcelain supplies have been impacted by the fuel shortages caused by the blockades in the Strait of Hormuz. Production ceased completely for a short time. Now the factories are open again the production price for porcelain has gone up. We have good supplies of European mid-range porcelain, and the price points between this and what used to be an entry level offer from India is narrowing.
Difficulties in getting stock from India have been compounded by the challenges we are facing due to the Iran war. Shipping costs have doubled, and while we are a long way short of the peaks we saw during Covid, container prices remain volatile and will be throughout the year.
Gorden Parnell, British Gypsum, the BMBI Expert for Drylining: The Middle East conflict, and other factors, have added to the uncertainty and inflationary pressures have also affected confidence. However, despite economic pressures and global uncertainty, sustainability hasn’t moved down the agenda. New legislation, tighter performance requirements, and increased scrutiny mean the industry is being asked to do more, with less time, less margin, and less room for error.
Sustainability in construction is at a turning point. It’s no longer enough to set targets and get head office commitments. What matters is how targets are delivered on site.
Visit www.bmbi.co.uk to read their full comments and the BMBI reports.
