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    Profit warnings trebled: implications for UK construction project risk and cashflow

    February 6, 2026|

    Reviewed by Joe Ashwell

    Profit warnings trebled: implications for UK construction project risk and cashflow

    First reported on The Construction Index

    30 Second Briefing

    Profit warnings from FTSE Construction & Materials companies more than trebled in 2025, rising to 18 from five in 2024, with 33% of listed firms issuing at least one warning – the highest level since the 33 alerts seen in 2020. EY-Parthenon attributes 50% of these warnings to contract and order cancellations or delays, with policy change and geopolitical uncertainty cited in 28% and rising costs in 17%. Increasing regulatory complexity around the Building Safety Act, legacy liabilities and labour shortages are eroding margins and straining working capital across project supply chains.

    Technical Brief

    • EY-Parthenon’s sector analysis is limited to UK-listed FTSE Construction & Materials companies only.
    • 2025 profit warnings in this sector reached their highest level since 33 alerts issued in 2020.
    • One-third of listed construction businesses issued at least one warning, compared with 17% across all UK-listed firms.
    • EY-Parthenon links delayed contract starts and project slippage directly to working capital strain along supply chains.
    • Regulatory complexity around the Building Safety Act is specifically cited as slowing approvals for new works.

    Our Take

    The FTSE Construction & Materials sector’s 33% warning rate in 2025 versus 17% across all UK-listed businesses signals that contractors and materials suppliers are materially more exposed to project timing risk than the broader market, which will likely tighten credit and bonding terms on UK projects.

    With 50% of 2025 warnings linked to contract cancellations or delays and 28% to policy or geopolitical shifts, UK-based project owners can expect more conservative pricing and stronger termination/change-in-law protections from contractors seeking to de-risk order books.

    In our Policy coverage, UK construction has been one of the more frequently cited regions for standards and project-delivery guidance, so this spike in EY-Parthenon-tracked profit warnings is likely to feed directly into updated risk-allocation norms in NEC/JCT-style contracts and public-procurement frameworks.

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    Prepared by collating external sources, AI-assisted tools, and Geomechanics.io’s proprietary mining database, then reviewed for technical accuracy & edited by our geotechnical team.

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