RCI Article – Builders’ merchants’ sales decline in Q3

Total Builders’ Merchants’ value sales to roofers, builders and contractors were down -0.8% in Q3 2019 against the same period last year. The adjusted figure, which takes into account the difference in trading days, was down -2.3% compared with Q3 2018.

Value sales of Heavy Building Materials declined marginally by -0.4% year-on-year with Timber & Joinery sales also falling by -4.7% over the same period. Workwear & Safetywear (+4.5%) and Kitchens & Bathrooms (+3.2%) were among the strongest categories in the quarter.

Compared with Q2 2019, Total Builders’ Merchants’ sales saw marginal growth of +0.2% in Q3. However, when adjusted for the four additional trading days in Q3, the figures showed a decline in sales of -6.0%, marking the second consecutive quarter with negative growth. Merchants’ sales in the two largest categories – Heavy Building Materials (-5.5%) and Timber & Joinery (-6.5%) – fell significantly quarter-on-quarter, on an adjusted basis.

September’s BMBI index was 118.9, with Landscaping (125.3) the top performing category.

John Duffin, Managing Director Keylite Roof Windows and BMBI’s Expert for Roof Windows, comments: “July sales were well ahead of the previous year, but a weaker August and September left roof window sales much the same at the end of Q3 as they were at the end of Q2 – in high single figures up on 2018.

“In quarter two, regional abnormalities saw growth in the Irish market offsetting the UK. Quarter three has now seen these variations ironed out and growth is more consistent across all regions.

“New build has been steady throughout the quarter and indications from our national and regional housebuilding customers are that this will continue until the end of the year. Forecasts for 2020 volumes range from flat to +5%. However, RMI (the housing repair, maintenance and improvement sector) which accounts for the bulk of sales will deliver any growth that’s forecast.

“In the face of continued Brexit uncertainty, GfK’s Consumer Confidence Index fell 3 points to -14 this October. However, not to overstate the gloom, for major purchases such as room-in-the-roof projects where roof windows are required, the GfK’s Major Purchase Index has slipped 3 points from October 2018, but it’s still positive at +1, which indicates growth.

“Consumers need a boost in confidence to fuel the growth in over-the-counter sales within builders’ merchants if the roof window industry is to see another double-digit growth year.”

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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