What do brick manufacturer trading updates reveal about construction cost pressures?

Recent trading updates from brick manufacturers Michelmersh⁽¹⁾ and Ibstock⁽²⁾ offer a useful insight into the conditions facing construction materials suppliers – and why the market can appear difficult to read for anyone involved in cost planning.

Both companies reported weaker market conditions in the opening months of 2026. Ibstock said UK brick market volumes were down 11% in the first quarter, while Michelmersh reported industry brick despatches around 10% lower year-on-year.

While neither update pointed to a collapse in demand, both manufacturers described a market where activity remains inconsistent, project starts are difficult to predict and customers continue to proceed cautiously amid affordability concerns and weak confidence.

No wonder construction cost behaviour currently feels uneven. A softer market would normally be expected to lead to clearer downward pressure on materials pricing. However, manufacturers are not responding to weaker volumes by simply chasing market share. In many cases, they are managing production more tightly, protecting utilisation rates and controlling inventory levels instead.

Michelmersh paused production at its Romsey brick facility earlier this year before restarting operations in May, while also confirming the closure of its Charnwood site. Ibstock said it remains focused on managing production volumes, inventory levels and overheads while continuing to monitor uncertain market conditions.

As heavy-side manufacturing relies on efficient factory utilisation, when volumes become inconsistent, reduced output can quickly affect operating efficiency and margin performance. Manufacturers therefore often prioritise production discipline over volume growth during weaker periods.

For cost planners, this can create a disconnect between construction activity and pricing expectations. In practice, weaker workloads do not always translate into immediate or widespread price reductions, particularly in energy-intensive product categories such as bricks, concrete and other heavy building materials. Manufacturers may instead reduce production, consolidate facilities or manage supply more carefully to avoid oversupply and margin erosion.

The updates also suggest that confidence remains one of the biggest issues affecting the market. Michelmersh referred to low consumer confidence and uncertainty around project commencement dates as a key challenge. Ibstock warned that inflation, geopolitical instability and interest rate pressures could continue affecting confidence and delaying recovery.

This aligns with broader conditions across construction, where viable projects are often progressing more slowly because clients remain cautious on affordability, financing and future demand.

Of course the cost implications extend beyond pricing alone. Where manufacturers are actively managing production and capacity, procurement timing and product availability can become more important risks, particularly if activity begins recovering unevenly across sectors or regions. Markets can tighten relatively quickly if manufacturers have already reduced output or rationalised facilities during the downturn.

There are also signs that manufacturers continue to position themselves for longer-term structural change rather than just simple cyclical recovery. Michelmersh is expanding prefabricated operations at its Romsey facility, while Ibstock highlighted ongoing investment in modern methods of construction and lower-carbon manufacturing technologies.

While contractors and clients remain focused on productivity, labour availability and carbon performance, this will continue to influence where manufacturers direct investment.

Several practical themes emerge from these updates for cost planners.

First, weaker construction output does not necessarily mean straightforward deflation in materials pricing. Supply-side decisions are playing a larger role in pricing behaviour than headline demand figures alone might suggest.

Second, volatility risk remains elevated. Manufacturers are continuing to manage output cautiously because visibility remains limited, meaning localised shortages or pricing movements could still emerge unexpectedly if demand improves faster than anticipated in specific sectors.

Third, procurement strategy may become increasingly important where manufacturers are consolidating operations or prioritising selected product lines. Lead times, supplier resilience and specification flexibility may carry greater commercial importance than they did in more stable market conditions.

Finally, the updates reinforce that the current market remains highly sentiment-driven. Interest rates, financing conditions and confidence continue to shape construction activity as much as underlying demand fundamentals. Recovery in the market, therefore, may remain uneven, with periods of improvement followed by renewed caution rather than a smooth upward trajectory.

For the supply chain, the message from both manufacturers is broadly consistent: activity is improving in places, but visibility remains weak enough that most firms are still prioritising caution, flexibility and margin protection over expansion.

To keep up to date with the latest industry news and insights from BCIS, register for our newsletter here.

^{(1) London Stock Exchange – Michelmersh Brick Holdings Plc – AGM Statement – here}

^{(2) London Stock Exchange – Ibstock Plc – AGM Statement – here}