2025: what can we expect?

As we end the year with a glimmer of hope for the green shoots of economic recovery, Chris Hayward, Chief Executive of NMBS, shares his views on what we are likely to see next year in the independent merchanting industry.

What a year it’s been. 2024 has been tough – too full of construction insolvencies, project delays, supply chain issues and slow customer payments than any of us wanted to see. In my conversations with merchants, many businesses are still adjusting their budgets and spending plans, hoping for recovery next year and are waiting to see how the changes in the autumn budget actually impact business in 2025.

Fortunately, the tail end of this year has provided some promising signs. With the Government’s announcements of funding for infrastructure and many more new homes, particularly a new waves of investment in social housing, along with gradually reducing interest rates as inflation is brought back under control, I suspect we will see an uplift in business and overall market confidence by the spring.

However, my message to independent merchants is that they should remain flexible and adaptable in the year ahead. With any economic boost, sudden reopening of sites or increased demand from housebuilders, we can expect to see exacerbated pressures on supply chains. Independents have strong relationships with dependable suppliers, so we must continue developing and maintaining these as the market changes. Customer service will also be critical during this period to help manage customers’ delivery and quantity expectations.

As awareness and interest continue to grow in the mass retrofit market, I think we can expect to see demand for RMI (repair, maintenance and improvement) products increasing from summer 2025. This strategically important market provides out members and suppliers with opportunities to specialise and find a competitive edge.

Technology offers another competitive opportunity. I have seen an increased use of technology among our merchant members, as Generation Z increasingly becomes the purchasing decision-makers in our industry. This has pushed online shops, delivery services like Deliveroo, and even TikTok success wider across our sector.

While I recommend that all our members and suppliers continue to innovate through technology, this may increase our susceptibility to cyber-attacks. So, at the same time, we must educate ourselves on cyber risks and take part in schemes, like Cyber Essentials, to provide our teams with the knowledge to protect our businesses. Six per cent of businesses in the construction industry had a cyber-attack in 2023, according to research from the Department for Science, Innovation and Technology, so this could have a significant impact if it is just ignored.

And finally, I can confidently predict that 2025 will again be a year of tackling skills shortages.

That’s why NMBS is maintaining its commitment to support new apprenticeships in the industry. 2024 saw us hit our target of 150 apprentices we have supported into our members’ and suppliers’ businesses. In 2025, we will continue our work with LEAP to provide programmes that are designed around specific builders’ merchant industry and construction sector needs. These will include Level 2 to Level 7 courses to provide a more specialised approach to training. We are also closely involved still in the BMF’s pledge to achieve 15,000 apprentices across the BMF membership by 2030.

The Construction Inclusion Coalition is working to improve equity, diversity and inclusion across the construction sector. Currently, only 6% of construction workers are from a global majority background, so I hope to see more awareness and support for less represented groups in the next year too.

Learn more about NMBS’s apprenticeship work for 2025 at https://www.nmbs.co.uk/hire-an-apprentice/