HVP Column Dec 17 – Heatrae Sadia

Strong fourth quarter wraps up a solid year for merchants

The Builders Merchant Building Index (BMBI) saw strong growth in 2017. Total Q4 2017 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. Overall, merchant sales in 2017 finished 4.8% ahead of 2016 by value.

Looking at Q4 in detail, total growth was supported by the two biggest value categories, Timber & Joinery (+7.3%) and Heavy Building Materials (+6.4%).  A number of other product categories also assisted the strong finish, notably Plumbing, Heating & Electrical, and Tools (both up by +7.7%), Ironmongery (+7.3%) and Kitchens & Bathrooms (+6.6%).

December slowed in comparison to both Q4 and the annual totals, but an extra trading day in 2016 hides the true performance. Growth per trading day grew faster than the annual average at +5.7%. Timber & Joinery at +8.6% was a major contributor, but internally focused categories – Plumbing Heating and Electrical +10.1%, and Kitchens & Bathrooms +8.9% – performed strongly year-on-year.

Paul Rivett, Managing Director Heatrae Sadia, BMBI’s Expert for Water Heating says:

“The performance of the water heating market in quarter four was somewhat mixed compared to Q4 2016. Products such as electric heating boilers and boiling water dispensers (Hot taps) performed well with recent increased consumer interest. It was more of a challenging performance for electric commercial water heaters and hot water cylinders.

“Package solutions containing storage water heaters, heating interface units and system manifolds among other products for multi occupancy dwellings grew strongly however. Such pre-plumbed system packages can offer a welcome solution to the skilled labour shortage. They offer a robust, quality-assured method of delivering water heating which is less reliant on the skills of the individual installer.

“The industry continues its struggle with labour pressures from both long-term issues such as an ageing workforce where large numbers can be expected to retire within a few years, as well as more recent pressures from Brexit and departing foreign workers. Product systems that are factory assembled and pre-designed off site – in all industry sectors – will become increasingly sought by contractors.

“Looking forward, Brexit negotiations continue to create uncertainty in the construction sector, and overall the market remains challenging. In water heating, however, we see strong growth developing in the new areas of opportunities such as package solutions for multi occupancy dwellings and Hot taps”.

BMBI Experts speak exclusively for their markets, explaining trends, issues and opportunities.

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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.