Builders Merchants sales grew 4.8% in value over 2017, with gains made in the tools and timber & joinery categories.
The growth was revealed by the BMF’s Builders Merchants Building Index (BMBI), which attributed the uplift to strength in private housebuilding and domestic repair, maintenance and improvement.
Annually, timber & joinery – the largest product group – grew +5.4%. Tools grew 6% annually and almost every category recorded sales growth in 2017, barring services, which dropped 2%.
Q4 sales were up 6.3% on Q4 2016, delivering stronger growth for the quarter than the running average, which in turn helped to push the annual growth numbers.
The BMBI uses GfK’s point of sale tracking data drawn from over 80% of builders merchants’ sales throughout the UK, making it the most reliable source of data for the sector, it claims.
“Our results have appeared out of kilter with headline figures from the ONS for some time, but if you drill down into their reports the results are comparable,” explained BMF CEO John Newcomb. “The lion’s share of merchant sales is driven by the housing market. While private housebuilding is forging ahead, assisted by Help to Buy, and private domestic RMI work is holding up well, the same cannot be said for commercial and industrial sectors which have seen a sharp decline post Brexit. We remain optimistic for continued growth in 2018, but I’m sure BMF merchants will be factoring in a number of outside factors – from monetary policy to Carillion’s demise – that could affect trading.”
Richard Frankcom, Senior Client Insight Manager, GfK said: “Builders merchants delivered a strong performance in 2017 during a period of political and economic uncertainty and a changing value of the pound, which compounded trading difficulties. The strength of the sectors they operate within has generated some of this growth, but price inflation has also been a contributing factor.
“There are a number of factors that could impact on trading in 2018. Initial reports have shown a weakening in new housebuilding, and there are renewed concerns over skilled worker shortages. With interest rates expected to rise sooner and faster than predicted, thereby increasing the cost of borrowing, we watch with interest to see if generalist builders’ merchants continue to defy market expectations and drive forward again in 2018.”