Andrew Simpson, National Commercial Director Hanson Cement is BMBI’s Expert for Cement & Aggregates
The Mineral Products Association reported weak sales volumes in Q2 2017 compared to Q1 with aggregates down 5.1%, and ready-mixed concrete (RMC) down 5.3%, confirming a general slowdown in construction activity. Sales of RMC have declined for three consecutive quarters in London, and we believe activity has now peaked in the capital, although volumes remain at high historic levels.
A weakening in overall activity was expected this year, reflecting the softer economic and construction outlooks post-referendum. Looking forward, major infrastructure projects such as Hinkley Point and HS2, plus Highways England’s road programme should help to steady the ship.
Builders’ merchants face a number of market ‘disrupters’. Leaving the EU will doubtless have a big impact on farmers and rural landowners who depend on European subsidies. Many large regional merchants who service the rural sector will be affected.
Materials and skill shortages are delaying project starts and will take time to overcome. Hardstone such as granite is becoming scarce, due to frustrating delays in the mineral planning system. Skill shortages are inherently disruptive, and we all have to do our bit to encourage young people into our markets with apprentice schemes, training and learning, and an attractive career path.
Merchants have been encouraged to adopt an Omnichannel approach to selling to future- proof their business. Amazon and other disrupters have created a new way of buying and selling, and their online model has been replicated across retail, influencing the way we buy. It’s been slowly moving into the merchant sector. With new initiatives such as www.built.co.uk this is accelerating. A building materials supplier has launched this new online platform to provide quick and easy access to a wide range of heavy and light side building materials, with full price transparency for digital savvy builders who want the same flexibility and convenience in their business life they experience as a consumer. Most builders and contractors still prefer to go to their local traditional branch, but it’s important to change how you sell to suit those who prefer to buy a different way.
See the full Q2 Report here: https://www.bmbi.co.uk/the-index/