.png)
UK-listed companies in the FTSE 91黑料网 and Materials sector issued eight profit warnings during the first six months of 2025, compared to just two in H1 2024.
This is the highest total since the covid-19 pandemic in 2020, according to EY-Parthenon鈥檚 latest Profit Warnings report.
Listed firms in the sector issued five profit warnings in the first quarter 鈥� already equalling the total for the whole of 2024 鈥� plus a further three in the second quarter.
EY-Parthenon UK & Ireland turnaround and restructuring partner Tim Vance said: 鈥淭he latest data shows that the construction sector, which saw some recovery in 2024, supported by repair and maintenance demand, easing costs and infrastructure investment, is under renewed pressure so far this year. Previous gains are being eroded by the return of cost and demand challenges, which are exposing persistent structural weaknesses. Whilst longer-term supply and demand dynamics should support growth in the sector, there are a number of nearer-term challenges that are impacting contractors and the supply chain.
鈥淩egulatory complexity, particularly from the Building Safety Act, continues to slow approvals and disrupt delivery, while labour shortages and the increase in employer national insurance contributions are also squeezing margins. Access to bonding and trade credit insurance has been tightening and the sector remains susceptible to shocks. A drop off in demand may ease some of these pressures, but this tends to help main contractors more than subcontractors and suppliers, where financial stress has been concentrated.
鈥淚n this period of heightened economic uncertainty and an ever-evolving construction landscape, companies that can effectively manage risk, drive innovation and cultivate strong partnerships will be best positioned to succeed.鈥�
Overall, across all industries, UK-listed companies issued 121 profit warnings in the first half of 2025, including 59 during the second quarter. The leading factor behind profit warnings in Q2 was policy change and geopolitical uncertainty, cited in 46% of warnings. This marked a significant year-on-year increase from just 4% in Q2 2024, and the highest percentage recorded for this cause in more than 25 years of EY鈥檚 analysis.
The proportion of profit warnings to cite contract and order cancellations or delays in Q2 remained at a record 40%. One in three warnings (34%) cited tariff-related impacts, including weaker demand, supply chain disruption, and exchange-rate volatility.
EY-Parthenon UK & Ireland turnaround and restructuring strategy leader Jo Robinson said: 鈥淭he scale of persistent uncertainty and how heavy it continues to weigh on UK businesses is clear. While this uncertainty has been a recurring theme since mid-2024, it has intensified so far this year 鈥� driven largely by geopolitical tensions and policy shifts 鈥� compounding pressure on both earnings and forecasts.
鈥淲hether the rise in profit warnings is cyclical or structural remains to be seen, and we still expect earnings pressure to ebb and flow with the macroeconomic backdrop. As companies operate in a risk and forecasting environment that is challenging to navigate, they must adopt a measured, scenario-based approach that balances both agility and strategic clarity.鈥�
Got a story? Email news@theconstructionindex.co.uk
