RCI Column – Builders’ merchant sales bounce back in May

The latest figures from the May Builders Merchant Building Index (BMBI) report reveal a sharp rise in sales as lockdown restrictions ease and trades return to work.

Year-on-year

Total Builders Merchants value sales to roofers, builders and contractors in May were down -39.9% compared with May 2019, reflecting the cautious reopening of merchant branches with many still operating a restricted service. However, the overall trading figures are a significant improvement on April 2020 sales (-76.3%).

All categories sold less, with Tools (-66.1%) and Kitchens & Bathrooms (-62.7%) hit hardest by the pandemic lockdown. Heavy Building Materials, the largest product category, was down -39.0% year-on-year. The biggest winner in May was Landscaping, with sales of this seasonal category down just -12.5% on May 2019.

Month-on-month

With April sales at unprecedented levels, May’s partial recovery resulted in some highly unusual month-on-month growth figures. Total merchant value sales were 171.3% above April 2020, with one less trading day this month. Five categories did better, led by Tools (+308%). Landscaping sold 278.9% more than in April and Kitchens & Bathrooms was up by 210.7%. Heavy Building Materials grew more slowly (+157.6%). Average sales a day in May across all merchants were 185.6% higher than in April.

Other periods

Year-to-date sales in the first five months of 2020 were 29.2% down on January to May 2019, with one less trading day this year. Workwear & Safetywear (-2.7%) did best, boosted by strong demand for protective equipment.

Index

May’s BMBI index was 78.7. With the exception of seasonal category Landscaping (152.5), all categories were well down.

Derrick McFarland, Managing Director Keystone Group UK and BMBI’s Expert for Steel Lintels, comments: “COVID-19 caused unexpected and widespread disruption. While construction is significantly affected, government recognition of the value of our sector to the economy led to swift action in April with the introduction of new measures and guidelines for safe working. So, from the end of April we’ve seen a gradual reopening of house building sites and merchant branches.

“The challenge now is survival, and what the volumes will be this year with new social distancing rules. Productivity from building sites, merchants and manufacturers will be restricted as we adopt these stringent procedures to prevent the continuing spread of COVID-19 and avoid another spike.

“While the Government has its hands full, building enough homes of the right quality, attractiveness and energy efficiency is still a priority. It may be difficult to achieve the same build numbers with social distancing on site, but there is a housing shortage and Britain needs well-insulated energy-efficient homes that look good. The most advanced steel lintels enable builders to save energy using a more cost-effective solution than other products.

“I see a different world ahead where technology enables video conferencing to maintain a visual relationship, cutting travel, which benefits the environment, while increasing efficiency and reducing costs. That said, the building industry traditionally thrives on networking so it’s important this continues, albeit in a new format.”

BMBI Experts speak exclusively for their markets.

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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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