RCI Article – Construction Strong Despite Brexit Fears and Downbeat ONS Stats

Construction strong despite Brexit fears and downbeat ONS stats

August builders’ merchants’ sales were strong, with little evidence of predicted post-Brexit blues.

Total Builders Merchant August sales were 13.1% up on the same month in 2015, assisted by two additional trading days. Heavy Building Materials, the largest Builders Merchant Building Index (BMBI) category which includes roofing, cladding and insulation was up 14.1%.

Without the two extra trading days, total sales per day in August were 2.8% up year on year. Compared with July, August was ahead 2.3% helped by one additional trading day.

Total sales in the three months June to August were 1.6% higher than in March to May, although taking the three additional trading days into account, average sales per day were 3.1% lower.

BMF Managing Director, John Newcomb, commented “We’re surprised by the ONS construction output figures for August (-1.5%) as they don’t reflect what we see happening in the building materials industry. BMBI figures are actual sales, not estimates, and account for over 80% of the volume of the sector.

“There is lots of speculation on the impact of Brexit on construction, but sales up over 13% in August, shows that our industry is in robust health”.

Andy Williamson, Group Managing Director IKO PLC, BMBI’s Expert for Roofing Products comments: “It’s good to see the positive results from the latest BMBI report, which is echoed among housebuilders too. Bellway built 12.5% more homes than 2015 from sales up 26.9%. Chief Executive, Ted Ayres said their greatest challenge was the lack of availability of labour. On some sites in London, 70% of the workforce is from overseas. Brexit or not, this restriction affects the whole industry. It isn’t a London, big company or roofing problem. It’s building’s biggest constraint, and we must get the Government to work with us to find a solution.”

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.