Encon Insulation comment: Q1 2018

Mike Beard, Merchant Development Director Encon Insulation is BMBI’s Expert for Insulation Products – Distribution.

The first quarter was challenging for most players in the sector, due partly to the appalling weather. Many sites are now playing catch up. NHBC says anecdotal reports from housebuilders suggest that up to 30 days were lost on site due to extreme temperatures and weather.

Despite this difficult start I believe the outlook for housing is optimistic as new sites and phases open up all over the country. The CPA predicts a 5% increase in private housing output “with demand for new build underpinned by the support of Help to Buy through to March 2021.” ONS figures for private housing output, however, showed a 1.6% fall over the quarter.

Reflecting on such contrasting data, an article in Builders Merchants News by Mike Rigby, comparing ONS data with BMBI figures, explains how ONS initial figures are frequently revised upwards. Final ONS survey figures are much more positive than their headline-grabbing published levels and closer to the more positive BMBI numbers which are based on actual sales data from over 80% of GB merchants. Our industry glass may in reality be half full rather than half empty. Coincidentally the Bank of England Governor, Mark Carney, made the same point when interviewed by the BBC on 11th May.

Recently the demise of big retail names have made headlines, and the changing retail environment also translates into an urgent challenge for our industry. Omnichannel selling and marketing, where bricks and mortar interact seamlessly with online systems, is how successful businesses are managing the changing retail environment. In construction, the whole industry benefits if players can learn from the early movers in the field.

Price increases and product availability are particular challenges for insulation distribution.

Brexit can be used as an excuse for caution and lack of confidence, when it might it be a bit like the Millennium Bug – in reality a lot of fuss over nothing. Construction needs to get on with its own challenges and deal with issues as they arise not focus on the worst-case scenario!

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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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