IKO PLC comment: Q4 2018

Paul Owen, Commercial Director Distribution IKO PLC is BMBI’s Expert for Roofing Products.

Roofing product sales were strong in the last three months of 2018, with sales ahead of Q4 2017. Merchants and independent roofing distributers did particularly well. This overall positive picture however covers a broad range of performances in different areas.

In some regions – particularly in the key regional cities of Birmingham, Leeds, Manchester and Belfast – there has been a lot of major construction activity. The Deloitte Real Estate Regional Crane Survey, which monitors construction activity saw a sustained or increased level of development across a range of sectors including offices, residential, hotels, retail, education and student housing.

Housing repair maintenance and improvement (RMI) activity was also up on Q4 2017 and on Q3 2018. Some main contractors have reported difficulties in hiring roofers – an indication of a busy market and the continuing skills shortage. Minimal winter weather disruption also contributed to roofing contractors increased output, compared to the extreme weather in the first three months of 2018, and a difficult last three months of 2017.

Mid-sized roofing contractors report that surveys and enquiry levels are also up on the same period of 2017, giving some reassurance that clients are continuing to plan new projects despite the uncertainty, gloomy economic predictions and confusion emanating from Westminster and the cautious economic forecasts from economic bodies and the Bank of England. We now wait for confirmation of the project funding and the start dates of these projects.

Despite the now widely accepted view that we need to ramp up housebuilding to make good the housing shortfall and keep pace with the needs of a growing population, new build is not contributing as much to the overall positive picture. NHBC starts are 1.2% down on the same time last year with developers seemingly cautious as the Brexit deadline draws closer. Some regions look more positive, with Yorkshire and Humberside showing a 20% reported increase in housebuilding registrations.

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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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