RCI Article – A good start to 2018 for merchants

Total Builders’ merchant value sales to roofers, builders and contractors were up 8.4% in January 2018 compared with January last year, lifted by one additional trading day. Landscaping (+14.5%) was strongest, with Ironmongery (+12.0%), Plumbing Heating & Electrical (+10.7%) and Timber & Joinery Products (+9.0%) also doing well. Five categories grew more slowly, including Heavy Building Materials (+6.9%) but all sold more this year. Average sales a day in January, which takes into account the difference in trading days, were 3.4% higher than in January 2017.

Compared with December, January had six more trading days and this resulted in month-on-month sales growth of 33.8%. However January’s average sales a day were 2.7% lower than in December and most categories sold less. Ironmongery (+2.4%) and Timber & Joinery Products (+1.0%) did better.

The latest three months (November 2017 to January 2018) were 5.5% up on the same three months a year ago, with an equal number of trading days. Timber & Joinery Products were stronger (+6.6%). January’s BMBI index was 102.6, with one additional trading day. Seasonal category, Plumbing Heating & Electrical was top (127.2).

John Duffin, Managing Director Keylite Roof Windows, BMBI’s Expert for Roof Windows says: “The year 2017 finished positively with a strong Q4 performance for roof window sales giving a welcome boost after a relatively flat quarter three. These upbeat figures meant double digit growth for the full year and this has continued into the early months of 2018.

“In contrast, ONS Construction Output Data for January reported the ninth consecutive decline in its three-month on three-month series. The difference between ONS data and our sector’s sales growth is likely to shrink when the ONS figures are revised as their full data comes in. Revisions get little publicity but can be chunky. For example, +0.2% in Q1 is now +2.3%! Q2 has gone from -1.3% to -0.5% with more revisions due, and Q3 has shifted from -0.9% to -0.3% with more to come.

“In part too, it’s explained by a strong performance in private housing work, which recently reached its highest level on record. Merchants can see these trends turn into demand for roof windows at their counters. During 2017, white PVC-U windows and additional frame material choices were increasingly popular, meeting the demand for products relevant for the modern home. Nationally, housing supply lags demand, prompting expectations that it will continue to generate growth in new build and RMI. But, Brexit is the bogeyman with the potential to rain on the industry’s parade, regardless of underlying demand. However we believe the roof window industry will continue to push ahead in 2018.”

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.

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