Encon Insulation comment: Q3 2016

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

Objectively, Britain needs urgent investment in infrastructure and housing. Infrastructure looks certain to figure in the Chancellor’s Autumn Statement, even if expectations are being pared back. But recently, no doubt written from the comfort of one of London’s leafier suburbs, we’ve seen press articles arguing that we don’t have a housing crisis, we have long term wants that may have to wait. We won’t have long to wait to hear if these were unofficial Government spin or media speculation. We hope for positive news.

If Britain is to provide its poorly-housed population with decent homes to live, it must build around 300,000 a year for the next two decades. National housebuilders can only build just over half that number, and they’re not keen to build more. Fifteen years ago when we did build those numbers, we had a lot of small to medium sized house builders, developers and self-builders. They’re Britain’s best hope. At some point, Government will have to encourage small to medium sized enterprises back into the market to achieve those numbers and improve our housing stock.

Small to medium sized housebuilders, developers and self-builders are a growing part of the market. But they need more servicing and advice than larger firms. Supplying their insulation needs is more of a challenge, as it’s harder and more costly to stock a wider range and type of insulation for self-builds and one-off projects in the smaller volumes they need.

For example, current shortages of PIR have meant having to offer alternative products, specifications and expertise quickly. Adding value so merchants respond promptly and efficiently, and customers’ projects get built to time and specification without penalty.

Post Brexit referendum uncertainty is still evident, although shorter term market sectors are unaffected. Confidence and uncertainty have affected exchange rates, which are increasing the cost of materials and components. When supported by a robust economic case, sensible price increases should be encouraged to strengthen the whole supply chain.

It may be coincidence, but it’s a concern that since the referendum all four national builders’ merchants, Travis Perkins, Saint-Gobain, Wolseley and Grafton are closing branches and making redundancies. Is the restructuring good housekeeping, or the shape of things to come?

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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.