• Average sales reached £411,539 – a rise of 65.57% YoY and drop of 33.29% QoQ
• Purchase orders (POs) increased from 150 to 302 QoQ
• Excess stock reached a value of £151,561 – up from £75,619
• Lead times jumped from 14 to 23 days QoQ
• Profitability (GMP) stood at 32.62% (-0.26pp QoQ, -1.34pp YoY)

UK construction manufacturers are responding to shipping delays and rising demand for goods by tactically building stock levels as they approach the final quarter of the year.

New figures show that small and mid-sized firms generated £411,539 in sales in Q2 2025 – a 65.57% jump on the same period last year but 33.29% drop on the previous quarter

At the same time, lead days rose from 14 to 23 days QoQ and the number of purchase orders (POs) jumped by 132.21% YoY, and more than doubled QoQ, from 150 to 302. 

The figures appear in the latest manufacturing report from inventory management specialist Unleashed.  Unleashed is an inventory management software platform popular with small and mid-sized suppliers to the construction industry. Its quarterly report is based on data from more than 600 UK firms using the software, across manufacturing categories such as food and beverage, clothing and fashion, and construction. 

The report shows that building and construction manufacturers are now building stock levels in a bid to maintain product availability and service levels in the face of longer lead times – which increased by nine days from Q1 to Q2. 

The surge in purchasing corresponded with an increase in the value of excess stock, which more than doubled QoQ from £75,619 to £151,561.

Profitability – measured as Gross Margin Percentage (excluding wages) – also dropped marginally by 0.26 percentage points QoQ and 1.34pp YoY.

Ted Bromley-Hall, Managing Director at UK landscaping products manufacturer IBRAN, says sourcing raw materials going into the final quarter of the year has been a challenge, even more so with a big increase in demand. 

“We’ve used complex forecast modelling and AI to determine whether the increases follow a more regular pattern, so we can accurately communicate our material requirements to suppliers and logistics partners to prevent overstocking. Using AI for this kind of data analysis has allowed us to smooth out the supply side in the face of wild swings in demand.

“Because we use UK suppliers for our recycled plastics, lead times are only determined by what feedstock is available and what capacity they carry. The advantage to this is that there are no customs delays to worry about. The disadvantage is the competition to get hold of these materials from other companies. The key has been clear, data-informed communication, so that our suppliers can keep their production volumes consistent with our demand.” 

Meanwhile, Joe Llewellyn, GM of ERP Small Business at The Access Group, the parent company of Unleashed, said the move towards ‘cautious buffering’ should help firms weather any further supply challenges over the coming months.

“The rise in POs and stock levels marks a tactical pivot for construction manufacturers, with cautious buffering designed to mitigate the risk of delays and stockouts before year-end. 

“In many cases, this isn’t a knee-jerk reaction to market conditions but a measured response. As manufacturers become more data driven, they’re able to improve their forecasting capabilities and reduce the risks associated with stock purchasing decisions. 

“Looking ahead, there are promising signs that manufacturers will end 2025 in a good position. Sales are healthy, while separate figures show that business confidence has risen steadily every quarter this year. The Bank of England has also cut interest rates from 4.25% to 4%, while inflation is expected to fall below the 2% target. Taken together, this could contribute to margin recovery and selective growth.” 

This pattern was mirrored across all manufacturing sectors, with average sales reaching £365,565 in Q2 2025 –  a 47% jump on the same period last year and a rise of 1.9% QoQ. Like the construction industry, there was also a rise in POs, excess stock value and lead times QoQ.

Food saw the biggest jump in sales revenue at 60% QoQ, while beverages saw the sharpest rise in POs at 250%. Lead times jumped most dramatically in sports and recreation (175%), while the value of excess stock grew fastest in electronics and telecommunications – more than tripling from £24,743 to £94,034. 

View the full Unleashed Manufacturing Health Index report.