The Builders Merchant Building Index

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VALUE EX VAT Index Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019
Total Builders Merchants 100 112.9 100.9 106.0 116.0 119.1 107.2 106.4 124.4 124.0 110.6 112.9 122.9
Timber & Joinery Products 100 111.1 100.7 107.1 112.3 117.1 108.1 109.5 122.9 128.3 114.7 116.7 122.8
Heavy Building Materials 100 113.6 101.4 105.7 116.9 120.7 107.9 104.9 124.2 123.5 109.9 112.0 122.2
Decorating 100 110.0 98.2 101.7 107.2 113.9 102.3 103.0 112.8 116.2 106.5 107.5 111.0
Tools 100 102.8 97.3 106.7 104.7 109.8 104.7 104.2 109.6 110.1 104.7 103.0 100.2
Workwear & Safetywear 100 99.4 105.5 108.8 95.3 100.9 110.0 110.9 97.3 100.6 110.9 103.2 98.3
Ironmongery 100 115.5 107.4 115.3 117.9 125.3 115.2 117.8 122.3 123.7 115.8 120.5 122.6
Landscaping 100 127.0 89.8 96.1 146.0 130.4 93.8 91.4 155.5 140.6 98.7 105.6 157.4
Plumbing, Heating & Electrical 100 105.3 113.9 119.9 106.0 113.4 122.7 129.5 120.1 117.2 128.1 129.2 115.8
Renewables & Water Saving 100 66.5 59.0 78.2 69.4 69.0 69.1 77.1 73.2 68.7 63.6 71.2 66.3
Kitchens & Bathrooms 100 106.1 104.7 110.6 109.6 115.2 111.6 114.6 116.3 117.6 110.6 115.9 114.8
Miscellaneous 100 115.1 109.4 115.5 112.5 120.5 111.4 113.9 115.7 112.4 110.1 116.5 116.6
Services 100 113.9 98.9 99.3 107.6 112.4 100.7 98.9 117.3 116.1 106.4 98.8 113.9

Source: GfK's Builders Merchants Total Category Report - July 2015 to June 2019

Quarterly Overview - Q2 2019

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. Q2 2019 saw a decline of -1.2% in value terms against Q2 2018, but this is exclusively driven by the month of June. 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, alongside one less trading day resulting in June 2019 being down by -8.1% year on year. 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.

The topline value indicator for Q2 2019 vs 2018 shows Timber & Joinery stable at -0.1%, balanced against minimal Timber increases and a slight decline in Sheet Materials. Heavy Building Materials has declined by 1.6%, with highlights including growth for Plaster & Plasterboards and Insulation and a decline in Aggregates.

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% however Tools has shown a sluggish performance down by -4.9%.

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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