The Builders Merchant Building Index

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VALUE EX VAT Index Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020
Total Builders Merchants 100 116.0 119.1 107.2 106.4 124.4 124.0 110.6 112.9 122.9 123.1 106.4 105.6
Timber & Joinery Products 100 112.3 117.1 108.1 109.5 122.9 128.3 114.7 116.7 122.8 122.4 107.4 104.3
Heavy Building Materials 100 116.9 120.7 107.9 104.9 124.2 123.5 109.9 112.0 122.2 123.0 105.0 104.8
Decorating 100 107.2 113.9 102.3 103.0 112.8 116.2 106.5 107.5 111.0 116.6 106.0 102.5
Tools 100 104.7 109.8 104.7 104.2 109.6 110.1 104.7 103.0 100.2 101.4 96.0 90.3
Workwear & Safetywear 100 95.3 100.9 110.0 110.9 97.3 100.6 110.9 103.2 98.3 105.0 117.9 129.1
Ironmongery 100 117.9 125.3 115.2 117.8 122.3 123.7 115.8 120.5 122.6 124.8 113.8 112.7
Landscaping 100 146.0 130.4 93.8 91.4 155.5 140.6 98.7 105.6 157.4 142.5 95.3 102.6
Plumbing, Heating & Electrical 100 106.0 113.4 122.7 129.5 120.1 117.2 128.1 129.2 115.8 120.1 125.8 121.0
Renewables & Water Saving 100 69.4 69.0 69.1 77.1 73.2 68.7 63.6 71.2 66.3 76.7 68.3 79.2
Kitchens & Bathrooms 100 109.6 115.2 111.6 114.6 116.3 117.6 110.6 115.9 114.8 121.4 114.6 111.9
Miscellaneous 100 112.5 120.5 111.4 113.9 115.7 112.4 110.1 116.5 116.6 127.4 115.0 129.5
Services 100 107.6 112.4 100.7 98.9 117.3 116.1 106.4 98.8 113.9 118.3 107.7 102.0

Source: GfK's Builders Merchants Total Category Report - July 2015 to March 2020

Quarterly Overview - Q1 2020

Most people would agree that 2019 was a memorable year, mostly for the wrong reasons, as Brexit kept dragging its feet. The thought at the beginning of 2020 was a new year and decade would see some positive shifts in the Builders’ Merchant industry and a period of growth was ahead.

I remember reading a news article at the beginning of January about the initial outbreak in Wuhan, when about 80 people contracted the Coronavirus. Four months later and we’re in an upside-down world that will never be the same when things return to normal.

For builders’ merchants this upside-down world became a reality towards the end of March as a nationwide lockdown was enforced. Sales come to a standstill overnight, with only essential deliveries done.

Overall, Q1 2020 was down by -6.7% in value, with all core categories affected. The shift becomes more evident comparing February to March figures for the two most recent years. In 2019, February to March saw an increase of 14.6%, but in 2020 a decrease of -1.9% took place.

Heavy Building Materials was down by -6.5% from Q1 2019, with Bricks, Blocks and Insulation seeing the largest declines. Timber & Joinery saw an even larger decline of -11.1%, with Timber and Sheet Materials most affected and Cladding the only area that saw growth from 2019.

Other noticeable market shifts include a -12.7% decline for Tools, and a -7.4% decline for Plumbing, Heating & Electrical. In the former, Power Tools is the driving factor behind the drop, while the latter has been negatively affected by both Plumbing and Electrical Equipment. The one interesting shift was a 24.2% growth in Workwear and Safetywear, which could be expected under current circumstances.

Projections for the remainder of 2020 are difficult to make, but we know there will be a significant drop in April sales. The next few months will be critical in determining how the industry adapts to the new “normal”. Online sales will continue to grow and start to play an even bigger role going forward. The journey to recovery has only just started, but the positive light in all of this is that the industry remains as resolute and determined as ever.

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