Dulux Trade comment: Q4 2018

Paul Roughan, Trade Merchants Sales Director Dulux Trade, is BMBI’s Expert for Paint.

The trade paint market finished with a strong December performance – a year-on-year growth of 1.9% in volume compared to December 2017. We have now seen six months of consecutive year-on-year volume growth in the market, a pattern which we’ve not seen since 2015. Emulsions played a major part in the paint categories driving this growth. The great summer weather also helped with perfect exterior decorating conditions and both masonry paint and exterior trim categories grew last year. With the second half of the year playing catch up and compensating for extreme weather delays in quarter one, total volumes for 2018 finished flat compared to 2017.

Several economic and housing indicators reflect a weaker market position towards the end of 2018. Consumer confidence fell by one point in December to its lowest point for five years – surely a reflection of the ongoing uncertainty over Brexit. In the housing market, new buyer enquiries fell by 21% in November and mortgage approvals in November were down by 1.7%. These two indicators hugely influence the paint market, as private housing RMI is by far its biggest sector. Fewer people moving home, means fewer people employing decorators to decorate their homes. With 69% of ‘paint appliers’ working mainly in private homes, this presents some broader challenges for our industry.

BMBI reports decorating as one of the underperforming categories and this has been a constant trend since early 2016. There is a real opportunity though for builders’ merchants; small generalist builders are a growing sector and indicators show they are buying more paint. Although there is a decline in confidence and an investment hesitancy that’s affecting the construction industry, there is steady value growth. Builders’ merchants that have the right products in the right place with staff who understand decorating products can leverage this opportunity, and profit from increased paint sales.

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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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