The Builders Merchant Building Index

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VALUE EX VAT Index Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
Total Builders Merchants 100 113.6 112.9 100.9 106.0 116.0 119.1 107.2 106.4 124.4 124.0 110.6
Timber & Joinery Products 100 109.0 111.1 100.7 107.1 112.3 117.1 108.1 109.5 122.9 128.3 114.7
Heavy Building Materials 100 114.1 113.6 101.4 105.7 116.9 120.7 107.9 104.9 124.2 123.5 109.9
Decorating 100 107.0 110.0 98.2 101.7 107.2 113.9 102.3 103.0 112.8 116.2 106.5
Tools 100 103.5 102.8 97.3 106.7 104.7 109.8 104.7 104.2 109.6 110.1 104.7
Workwear & Safetywear 100 100.1 99.4 105.5 108.8 95.3 100.9 110.0 110.9 97.3 100.6 110.9
Ironmongery 100 112.2 115.5 107.4 115.3 117.9 125.3 115.2 117.8 122.3 123.7 115.8
Landscaping 100 142.2 127.0 89.8 96.1 146.0 130.4 93.8 91.4 155.5 140.6 98.7
Plumbing, Heating & Electrical 100 105.2 105.3 113.9 119.9 106.0 113.4 122.7 129.5 120.1 117.2 128.1
Renewables & Water Saving 100 69.1 66.5 59.0 78.2 69.4 69.0 69.1 77.1 73.2 68.7 63.6
Kitchens & Bathrooms 100 104.1 106.1 104.7 110.6 109.6 115.2 111.6 114.6 116.3 117.6 110.6
Miscellaneous 100 111.3 115.1 109.4 115.5 112.5 120.5 111.4 113.9 115.7 112.4 110.1
Services 100 114.7 113.9 98.9 99.3 107.6 112.4 100.7 98.9 117.3 116.1 106.4

Source: GfK's Builders Merchants Total Category Report - July 2015 to December 2018

Quarterly Overview - Q4 2018

Total Builders Merchants fourth quarter sales were a respectable 3.1% higher than in Q4 2017 but look closer and things were less encouraging. The quarter started well, with October sales up 6.8% year-on-year. However November only grew by 0.8% and, as this latest report shows, December was only 1.0% higher than December 2017. Factor in inflation and volumes will have been lower.

The economy is losing momentum, with 2018 growing at its slowest annual rate for six years (ONS). Contributory factors were lower factory output, car production and weaker construction. NHBC new home registrations in 2018 were broadly flat, whilst numbers moving house have fallen. Fewer movers impacts on RMI, with a consequent fall in replacement kitchens, bathrooms, windows, re-decoration and refurbishment work.

The elephant in the room is, of course, Brexit. Nearly two years after Article 50 was triggered and a little over a month to go before the UK’s departure date we remain in a state of limbo. It’s hardly surprising that investment by businesses and home-owners has slowed.

Quarter 4
Timber & Joinery Products had a strong fourth quarter, finishing 6.1% ahead of Q4 2017. Landscaping (+5.2%), Plumbing Heating & Electrical (+4.4%) and Decorating (+4.1%) also out-performed merchants generally. Seven categories did less well, including Heavy Building Materials (1.9%) and Kitchens & Bathrooms (-0.9%).

Quarter 4 sales are generally lower than Quarter 3 and Total Builders Merchants average daily sales were down 4.9%. However two categories strongly bucked the trend, with Workwear & Safetywear up 17.7% and seasonal category Plumbing Heating & Electrical 16.6% higher. The fourth quarter Builders Merchant Building Index was 110.6. Plumbing Heating & Electrical did best (128.1) and ten of the twelve categories exceeded 100.

Last 12 months
Total sales in 2018 were 3.8% higher than in 2017. Four categories did better, led by Plumbing Heating & Electrical (+7.1%), with Timber & Joinery Products (+7.0%) just behind. Six categories grew more slowly, including Kitchens & Bathrooms (+2.7%) and Heavy Building Materials (+2.5%).

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