RCI Column – Strong April for builders’ merchants’ sales as bounce back continues

Jim Blanthorne

The latest Builders Merchants Building Index (BMBI) report, published in June, shows that builders’ merchants’ value sales to builders, roofers and contractors remained strong in April as the industry continues to recover from the pandemic.

Year-on-year

Total Builders Merchants value sales in April 2021 were exceptionally high compared to April 2020 (+419.2%), as many merchants and construction sites were temporarily closed during April last year. A better barometer of performance is comparing sales with April 2019, a pre-pandemic year, which shows sales were up by 22.1%. Landscaping (+63.3%) and Timber & Joinery Products (+37.2%) performed the best over this period.

Last three months

Total value sales in February to April 2021 were 72.4% higher than the same three months in 2020, with one more trading day this year. Compared to the same three months of 2019, total sales were up 15.6%, helped by two more trading days. Landscaping and Timber & Joinery Products led the way. Heavy Building Materials sales grew more slowly (+8.9%).

Month-on-month

Compared with a record-breaking March, Total Builders Merchants sales in April were slightly lower month-on-month (-0.9%), not helped by three fewer trading days in the month. Only Landscaping (+15.5%) and Timber & Joinery Products (+0.4%) sold more.

Index

The BMBI index for April was 150.6, the second-highest ever recorded. Landscaping (257.0) was the strongest category, followed by Timber & Joinery Products (176.3). The Index for Heavy Building Materials was 137.4.

Jim Blanthorne, Managing Director of Keylite Roof Windows and BMBI’s Expert for Roof Windows, said: “As we reflect on the year so far, a combination of higher than forecast demand, learning to adapt to a post-Brexit customs environment, and material availability challenges would best be described as character building. We have needed every ounce of our passion, agility and resilience to come out smiling!

“Sales performance was generally strong, albeit with a slightly slow start to the year which could be attributed to the understandable stock piling by merchant stockists in Q4 2020 to mitigate Brexit related supply chain risks.

“Other core markets continued to perform well, bolstered by continued strong demand from the RMI sector together with a marked increase in construction output. Government stimulus in the form of extended stamp duty holidays amongst other measures resulted in the strongest property market in a decade.

“Brexit has certainly not come without cost. While we successfully negotiated the anticipated shipping challenges, the new customs arrangements (combined with Covid disruption) have resulted in significant surcharges from hauliers, while the administrative burden of reporting on our import and export activity resulted in the need to recruit.

“Roof window core materials of timber, PVC, aluminium, glass, foam, plastic and steel components have all seen availability issues and/or cost increases due to Covid, shipping challenges and capacity reductions. Keylite appear to have fared better than some, having largely being able to shelter our customers from the disruption using our significant stock holding at our distribution centres, however cost inflation will inevitably result in upwards pressure on price.

“The fragility of global supply chains is more apparent than ever. Our commitment is to continue to increase stocks of raw materials, sub components and finished goods to mitigate against this, in support of growing volumes with our loyal customers.”

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

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