UK-listed companies in the FTSE Construction and Materials sector issued 18 profit warnings during 2025, more than three times the number recorded in 2024 (five), and the highest annual total since the height of the Covid-19 pandemic in 2020 (33).
EY-Parthenon’s latest Profit Warnings report reveals that a third (33%) of the sector’s listed businesses issued at least one profit warning last year – more than double the 14% seen in 2024.
Despite a slight fall from Q3 2025, when six warnings were issued, to the four warnings recorded in Q4, the FTSE Construction and Materials sector ranked third‑highest for warnings last year, behind only FTSE Software and Computer Services (30 warnings) and FTSE Industrial Support Services (23).
The leading factors behind profit warnings from UK-listed construction companies in 2025 were contract and order cancellations or delays, cited in half (50%) of all warnings, policy change and geopolitical uncertainty (28%), and rising costs (17%).
Tim Vance, EY-Parthenon UK&I Turnaround and Restructuring Partner, said: “The steep rise in profit warnings across the sector shows that FTSE Construction and Materials companies continue to be significantly impacted by delays in contract starts or slippage in project timelines, which are impacting revenues, disrupting delivery and straining working capital across the supply chain.
“Increasing regulatory complexity – particularly relating to the Building Safety Act – continues to slow approvals, while legacy liabilities and labour shortages are also weighing on margins, with rising employment costs adding further pressure.
“There are some signs of encouragement for the months ahead, such as the potential for increased infrastructure spending, particularly in the utilities sector. Lower borrowing costs and easing inflationary pressures could also support demand across parts of the construction market. In this rapidly-evolving landscape, both resilience and agility remain fundamental to success. Businesses that can effectively manage risk, drive innovation and cultivate strong partnerships will be in the best possible position to thrive.”
Overall, UK-based listed companies issued 240 profit warnings last year – including 55 in Q4 – the lowest annual total since 2021, when 203 warnings were recorded.
More than two in five (42%) warnings issued in 2025 cited the impact of policy change and geopolitical uncertainty as a leading factor. This marked a significant increase from 12% during 2024, and the highest annual proportion recorded for this cause in more than 25 years of EY’s analysis.
Nearly a fifth (17%) of all UK-based listed businesses have issued at least one profit warning in the last 12 months.
Jo Robinson, EY-Parthenon Partner and UK&I Financial Restructuring Leader, added: “Our latest data shows that the pace of UK profit warnings has slowed, but this feels more like an uneasy pause than a turning point. Many firms continue to face a challenging and uncertain backdrop, with a record level of warnings referencing the knock-on effects of policy and geopolitical upheaval, including tariff-related impacts, Autumn Budget uncertainty, and employer National Insurance contributions changes coming into effect.
“In the last year, we’ve seen businesses shift their focus from planning for a return to previous norms, to recalibrating for a global landscape of lower growth, higher costs and rapid technological disruption. There is no playbook for adapting to this new reality and, while stronger liquidity and lower interest rates have given companies some breathing space, we expect restructuring activity to build as these issues come to a head.
“Much now hinges on what comes next: a bullish recovery where stability and falling interest rates boost confidence, or something more downbeat marked by slow growth and heightened volatility. With 2026 now well underway, these two contrasting narratives are finely balanced.”
