A new report has claimed that rising costs are placing growing pressure on the financial resilience of plumbing and heating businesses, with margins tightening despite stable workloads.
The findings have been revealed in SNIPEF’s Q4 2025 State of Trade survey. 41% of firms reported they were busier than expected, with 36% reporting workloads above expectations. However, this has not translated into stronger financial performance, with 47% of firms reporting falling profit margins, including 14% experiencing a significant decline.
93% of respondents also reported rising input prices.
More positively, 45% of firms reported feeling confident or very confident, which is up from the 33% recorded in Q3. In contrast, sentiment towards the wider economy remains weak, with only 9% of respondents confident or very confident about the UK economy, while 51% reported being pessimistic or very pessimistic.
Fiona Hodgson, chief executive of SNIPEF, said, “Q4 shows that demand is holding up and firms are continuing to find ways to stay resilient. However, the defining feature of the quarter is the deterioration in profitability. Too many businesses are absorbing higher costs and ongoing supply chain pressures without being able to protect their margins.
“Across 2025, the message from employers has been consistent. The profession is stable, but the conditions around it are not. Cost inflation has remained widespread, skills shortages continue to limit growth, and confidence in the wider economy is weak. Q4 is a clear warning that resilience is increasingly being sustained through margin compression.”
The State of Trade report also highlighted a growing contradiction in the plumbing and heating labour market. Skills shortages remain widespread, with 67% of firms reporting low local availability of skilled professionals, yet appetite to recruit and train apprentices remains weak, with 64% very unlikely to recruit an apprentice in the next six months.
Fiona Hodgson said, “Employers want to train the next generation, but the economics no longer stack up. We are seeing acute skills shortages at the same time as businesses are pulling back from apprentice recruitment because the costs sit almost entirely with the employer. Without proper support, firms are being asked to absorb thousands of pounds in training costs at a time when margins are already under severe pressure.”
SNIPEF is urging policymakers to focus on conditions that determine whether SME businesses can invest, recruit and train. The organisation said priorities should include stronger support for skills and apprenticeships, measures to reduce the cost burden on employers, and greater certainty to support business planning and household investment.
