Face into Headwinds with a Strong Stance

The first ten months of 2017 were strong for the merchant sector. The most recent Builders Merchant Building Index (BMBI) quarterly figures indicate that builders’ merchants experienced continued sales growth in July – September 2017. On top of that, the January to October figures show total sales were up 4.9 per cent compared to the same period in 2016.

This data follows months (and years) of concerted effort – by both the construction industry and government – to solve the housing crisis. 2017 saw housebuilding figures at its highest level since before 2008, boosting sales for merchants.

And this could be set to continue thanks to the Chancellor’s November Budget pledge to scrap stamp duty for most first-time buyers; a commitment designed to boost the number of people making it on to the property ladder. Couple this with efforts to increase both supply and demand through the extension of the Help to Buy equity loan scheme announced in October, and 2018 could be the year where we see the housing crisis begin to ease.

Housing is a key market for the insulation industry and builders’ merchants, and high delivery targets were a key driver for sales last year. We saw annual growth in our mineral wool insulation for cavity wall application last year, as well as growth in glass mineral wool sales. The government’s commitment to increase housing sales should certainly maintain demand for mineral wool products and other building materials into the future.

But there are challenges ahead. The entire industry, not just the merchant sector, faces a shortage of available skills. Brexit’s effect on the value of Sterling is already removing incentives to come to the UK to work. For the many construction workers from Eastern Europe living here who send money back home, working in the UK simply gives them less money than they once had. And, should we be faced with a deal that halts immigration, the issue will only become more acute.

On top of this, the full review of the Building Regulations, which is expected to be completed in Spring this year, could potentially bring with it a range of new guidelines for our industry to adhere to. For the merchant sector, this brings a whole host of challenges if staff will need to be trained to advise on any new regulations.

Amid a challenging and uncertain environment, 2018 must be a year of increased collaboration and support across the entire construction supply chain. It’s only with this approach that we can face into headwinds with a strong stance, and continue to build on the positive growth reported in 2017.

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Launched in 2015, the award winning monthly Builders Merchant Building Index (BMBI) report is the only reliable measure of repair, maintenance & improvement (RMI) activity in the UK. Filling an important gap, it can be widely used in construction, and by economists, Government, national media, commentators and influencers outside the industry.

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