Slowdown in builders’ merchants’ sales in Q2

Following a strong start to the year, Total Builders’ Merchants’ value sales to builders and contractors were down -1.2% in Q2 2019 against the same period last year. However, the adjusted figure, which takes into account differences in trading days, was marginally positive at +0.4%.

Value sales of Heavy Building Materials, the largest category, declined by -1.6% year-on-year. Landscaping products was the best performing category, rising by +1.2%.

The negative quarterly figure was heavily influenced by poor trading towards the end of the period, with overall sales in June down -8.1% compared with the same month last year. Most product categories recorded a negative performance.

Quarter-on-quarter, however, the picture is more positive. Total Builders’ Merchants’ sales in Q2 2019 increased by +8.9% compared with Q1, and average sales a day (which takes into account the difference in trading days) were up +12.5% over the same period.

June’s BMBI index was 117.2, with Landscaping (146.6) the top performing category.

The BMBI uses GfK’s point of sale tracking data drawn from over 80% of builders’ merchants’ sales throughout the country, making it the most reliable source of data for the Repair, Maintenance & Improvement (RMI) sector.

Emile van der Ryst, Senior Client Insight Manager – Trade, GfK comments: “The exit of Theresa May, arrival of Boris Johnson and the passing of two Brexit deadlines has impacted business and consumer confidence in 2019. However it is the noticeable effect that weather has had on the industry over the past 18 months that stands out. June 2018 will

be remembered for extreme heat and a lack of rain, while 2019 saw most of England and Wales with a higher rain fall than average. Furthermore Q2 2018 sales spiked due to Q1 external construction delays following the Beast from the East, so assessing Q2 2019 too harshly would be wrong.

“Year to date figures still show value growth against 2018, but this has slowed down to 2.1% with price inflation the driver as volume continues to slow. The core sectors of Heavy Building Materials and Timber & Joinery have driven most of this growth, increasing in value by 2.2% and 3.1% respectively. Landscaping remains the best performing, up by 6.5%.

“Core sub-categories within these main categories are driving this performance and provide a positive indicator that the market continues to plug away, with Bricks, Plasterboards, Insulation, Timber & Flooring all seeing higher than market average increases. Does this emphasize the fortitude of the industry in riding through this challenging time, with better days hopefully ahead? Time will tell.

“Q3 should provide some smoothing of these short term weather trends, as well as a more realistic outlook on how the industry has progressed in 2019. The 31st of October deadline is just around the corner; will this deliver the end of these gloomy and turbulent times? In this current political climate who can tell.”

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