RCI Column – Builders’ merchants’ sales continue growth trajectory

The latest figures from the Builders Merchants Building Index (BMBI), published last month, reveal that year-on-year builders’ merchants’ value sales to builders, roofers and contractors are on an upward trajectory, as the industry continues to meet sustained high demand for building products.

The total builders’ merchants value sales were up 79.6% in May 2021 compared to May 2020, with no difference in trading days. Comparisons with May 2020 show a turnaround in fortunes for many categories including tools (+180%), which was the weakest category in May 2020. Six other categories more than doubled their year-on-year sales, including timber and joinery products (+115.1%).

The country was still in full lockdown in May last year, so significant increases are expected. However, total sales were also up compared to May 2019 (+7.9%), with two less trading days. Growth over the period was particularly strong for timber and joinery products (+28.1%) and landscaping (+26.5%).

Last three months

Total value sales in March to May 2021 were 110.6% higher than the same three months in 2020, helped by one more trading day this year.

Tools (+179.7%) was the strongest, followed by timber and joinery products (+147.3%) and landscaping (+130.8%). Total sales were also up on the same three months of 2019 (+17.5%), with no difference in trading days.

Month-on-month

Month-on-month figures indicate that May sales failed to reach the record-breaking heights seen in March and April (-6.1% in April, with one less trading day). All categories sold less.

Index

May’s BMBI index was 141.4, with two less trading days. The Index for heavy building materials was 128.6.

Kevin Tolson, commercial director at Wienerberger UK and BMBI’s expert for bricks and roof tiles, said: “After the new year started with a lockdown in January and bad weather in February, we saw a bounce back in demand in March and the strong performance has continued into the spring and summer months. The economic forecasts from the Bank of England are positive and have given rise to a resurgence in housing developer activity.

“The government’s scrapping of the Green Homes Grant Scheme after just a few months was a blow to the industry. It removes an important stimulus for achieving the nation’s carbon reduction targets, particularly after announcing an ambitious new target to cut carbon emissions by 78% by 2035.

“Britain’s 26 million existing housing stock is older and less energy efficient than most countries in Europe, and unless it is improved, it’s hard to see how the UK can meet its ambitious targets. Housebuilders, housing associations and homeowners will likely look to existing and new materials to improve the energy efficiency and performance of their homes. As manufacturers, we must continue to innovate and offer products and systems which improve building performance but without compromising on cost, quality or aesthetics.

“Overall, the sector has been buoyed by the continued enthusiasm for repair, maintenance and improvements (RMI), building on the trend of ‘improve don’t move’ popularised in 2020. Considering the three greatest barriers to buying a new home are earnings, deposits, and mortgage availability,* it seems as though continued stamp duty holidays and mortgage guarantee schemes are still not quite enough to stall the trend of homeowners investing in and improving their current abodes.”

This column was published in the August issue of Roofing, Cladding & Insulation Magazine (RCI).

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