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Josef Schachter – Schachter Energy Research Services Inc.
Tim Monachello – ATB Cormark Capital Markets Inc., Research Division

Presentation

Breedon Group CEO Rob Wood warns Labour’s 1.5m homes target will fail due to lack of government support for construction industry, cement supply threats and falling housing stock additions

Labour’s ambitious housebuilding pledge was destined to fail from the moment it was unveiled, according to the head of a prominent construction materials company.

Rob Wood, chief executive of materials specialist Breedon Group, told City AM that the government’s commitment to deliver 1.5m homes before the next general election is doomed because Labour has failed to adequately support its construction sector.

Mr Wood is urging ministers to safeguard the UK’s domestic cement supply, which he argues faces significant threats from inconsistent carbon regulations, elevated energy costs, climbing labour expenses and a growing influx of imported cement.

He argued that Labour’s failure to properly value the broader construction industry represents a key factor in why it will fall short of its housing ambitions.

Mr Wood said: “The day they announced it, it was already impossible. I can’t believe they still talk about it.

“They haven’t got that long left, and if you look at the current run rates they’re not going to get anywhere near it.”

According to the Office for Budget Responsibility’s most recent projections, net additions to Britain’s housing stock are set to decline from an average of 260,000 annually to a low of 220,000 in 2026-27.

Labour’s relaxation of planning regulations has yet to “meaningfully materialise” in accelerated housebuilding rates, the watchdog noted.

Whilst the next election – Labour’s deadline for meeting its housing target – is anticipated in 2029, the OBR indicated that construction activity will not see a substantial upturn until 2030.

Mr Wood is urging the government to tackle the cost of electricity in the UK and champion domestically produced cement in public procurement, to counter the “serious risks” confronting the cement industry.

“If there isn’t a robust and healthy domestic cement industry, everything will have to be imported, […] and ultimately it will all depend on the availability of products from overseas,” the boss of Derbyshire-based Breedon said.

Demand for essential construction materials such as concrete (-9.9 per cent), aggregates (-1.6 per cent) and asphalt (-1.1 per cent) declined for a fourth successive year in 2025, according to a Mineral Products Association (MPA) report.

Mr Wood argued the inflationary risks stemming from the Iran conflict – and the strain it places on mortgage rates and consumer confidence – demonstrate that the government should be able to depend on its domestic construction sector.

The costs confronting British construction firms threaten their capacity to deliver Labour’s industrial strategy and could jeopardise jobs, he warned.

Earlier this month, the head of a leading construction industry body revealed inheritance tax pressures on material and machinery suppliers, which are frequently family-run, are placing companies at risk.

Productivity levels are a crucial indicator of the UK’s economic health and the government celebrated improvements to these forecasts at last year’s Budget, but Breedon Group cautioned crumbling infrastructure is hindering productivity growth. Mr Wood said: “We don’t have enough schools, we don’t have enough hospitals, our road network is in a terrible state of repair, and the government keeps talking about productivity. “.

“If we don’t have the distribution networks, if we don’t have rail or road networks that are operating efficiently, no wonder productivity can’t improve.”

The FTSE 250 company unveiled its annual results for the year ending December 2025 on Wednesday, revealing a nine per cent revenue increase to £1.7bn.

However, pre-tax profit dipped by 16 per cent to £105m, whilst Breedon posted a record post-pandemic free cash flow generation of £133m, a rise of 17 per cent from 2024.

The firm’s results statement highlighted a “subdued” construction sector, with a “dynamic” economic environment overshadowing indications that growth might be on the upswing.

The Ministry for Housing, Communities and Local Government was approached for comment by City AM.

This article was written by

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