Merchants up in February
Total Builders’ merchant value sales to roofers, builders and contractors were up 4.0% in February compared with February last year. Five categories did better: Plumbing Heating & Electrical (+7.9%), Timber & Joinery Products (+6.6%), Ironmongery (+5.0%), Kitchens & Bathrooms (+4.6%) and Workwear & Safetywear (+4.5%). Six categories grew more slowly, including Heavy Building Materials (+3.2%) the largest category. Only Tools sold less (-1.6%).
Despite two fewer trading days, overall sales in February were 1.8% higher than January, led by Landscaping (+8.2%). Average sales a day (which takes account of trading day differences) were up 12.0%. Timber & Joinery products (-0.4%) did less well overall but average sales a day were 9.6% above January.
The latest three months (December 2017 to February 2018) were 4.2% up on the same three months a year ago and all categories sold more. Workwear & Safetywear (+9.1%) did best and Timber & Joinery Products (+6.3%) was also strong.
February’s BMBI index was 104.5, with one additional trading day. Seasonal category Plumbing Heating & Electrical was top (125.2) and Timber & Joinery Products (107.6) also performed well.
Steve Durdant-Hollamby, Managing Director Alumasc Water Management Solutions, BMBI’s Expert for Civils, Metal Rainwater & Drainage says: “Metal rainwater continues to grow with increased demand for colour and bespoke systems, particular in high end domestic and commercial sectors. Steel rainwater is also gaining ground as both new build and RMI markets recognise the benefits of metal systems for durability, design and performance compared with plastic. And with the cost of steel similar to plastic rainwater, it’s an easy choice for these projects.
“However it is a different picture for civils and drainage due to delays in large infrastructure projects and a growing skills shortage. Enquiries are strong, and many companies are busy with quotes and rebidding, but converting enquiries into sales is hard going and new projects are slow to emerge.
“Over the last three years, the squeeze on contractor margins has been significant. In 2014 the average top 10 contractor pre-tax margins were 2.9% according to the Construction Products Association. By 2017 this had fallen to -0.5%. So Carillion’s failure was no real surprise, and it could only have been a matter of time. It may be some months before we really start to feel the impact of its failure, but it has knocked confidence in our sector.
“Even in challenging times, there are opportunities to add value and improve margins with product solutions that combat the skills shortage. Suppliers in all areas of construction are increasingly being asked to develop new solutions or systems that make it easier, quicker, better and more efficient for contractors to complete their projects on time and on budget.
“The other big opportunity for this market is to think of the aesthetics when developing products. Rainwater and civils can be sexy and new technology is helping to add value with bespoke solutions that combine practicality and looks.”
BMBI Experts speak exclusively for their markets, explaining trends, issues and opportunities.