The Builders Merchant Building Index

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VALUE EX VAT Index Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
Total Builders Merchants 100 95.4 99.8 113.6 112.9 100.9 106.0 116.0 119.1 107.2 112.2
Timber & Joinery Products 100 96.6 100.0 109.0 111.1 100.7 107.1 112.3 117.1 108.1 112.9
Heavy Building Materials 100 94.5 99.3 114.1 113.6 101.4 105.7 116.9 120.7 107.9 110.8
Decorating 100 98.1 99.6 107.0 110.0 98.2 101.7 107.2 113.9 102.3 106.5
Tools 100 95.1 97.8 103.5 102.8 97.3 106.7 104.7 109.8 104.7 111.2
Workwear & Safetywear 100 104.9 108.2 100.1 99.4 105.5 108.8 95.3 100.9 110.0 108.3
Ironmongery 100 101.6 107.5 112.2 115.5 107.4 115.3 117.9 125.3 115.2 118.0
Landscaping 100 81.3 89.9 142.2 127.0 89.8 96.1 146.0 130.4 93.8 104.8
Plumbing, Heating & Electrical 100 109.0 112.0 105.2 105.3 113.9 119.9 106.0 113.4 122.7 136.1
Renewables & Water Saving 100 90.5 74.1 69.1 66.5 59.0 78.2 69.4 69.0 69.1 79.8
Kitchens & Bathrooms 100 98.5 103.7 104.1 106.1 104.7 110.6 109.6 115.2 111.6 120.3
Miscellaneous 100 99.0 108.1 111.3 115.1 109.4 115.5 112.5 120.5 111.4 114.2
Services 100 99.0 101.0 114.7 113.9 98.9 99.3 107.6 112.4 100.7 107.3

Source: GfK's Builders Merchants Total Category Report - August 2016 to March 2018

Quarterly Overview - Q1 2018

We have all seen the reports of a tough start to the year, but sales value growth from the Generalist Builders Merchants (GBM) would suggest they are the diamonds in the rough. Value growth continued in quarter one up 0.4% in absolute terms and up 2.0% per trading day year on year for the quarter.

Growth would have been stronger had it not been for the “Beast from the East” hammering the external product categories and Good Friday falling into March removing a trading day from Q1 2018. March was down -8.6% compared with March last year, as a result of two fewer trading days, but January and February’s sales compensated, at +8.4% and +4.0% respectively delivering growth for the quarter.

Quarterly growth was driven by Timber, up +2.3%, alongside multiple internal product categories, notably Plumbing and Heating (+8.0%), Kitchens and Bathrooms (+3.6%), Ironmongery (+2.1%), and Decorating (+1.2%) – all suggesting that work stayed inside due to the poor weather.

External categories fared less well with Landscaping – where garden walling and paving were particularly badly affected – down -4.9%, and the major category of Heavy Building down 0.8% with Cement and Blocks feeling the freeze.

Well, a diamond in the Rough then? They have outperformed the construction figures from the ONS, which fell 2.7% on the previous quarter (revised from -3.3% as originally published) and in addition, seem to be bucking the UK consumer’s negative outlook as seen in GfK’s Consumer Confidence Index, which was still in the doldrums. However, before we polish these diamonds, we need to see the delayed external work shift into April and then continued growth year on year in May and June. Value growth is great, but price inflation is a factor we cannot ignore and only this continued growth will really give us clarity.

For additional, deeper category insights and benchmarking please contact Richard Frankcom at GfK.

 

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