The Builders Merchant Building Index

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VALUE EX VAT Index Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020
Total Builders Merchants 100 106.4 124.4 124.0 110.6 112.9 122.9 123.1 106.4 105.6 76.4 124.6 111.1
Timber & Joinery Products 100 109.5 122.9 128.3 114.7 116.7 122.8 122.4 107.4 104.3 78.0 133.4 125.4
Heavy Building Materials 100 104.9 124.2 123.5 109.9 112.0 122.2 123.0 105.0 104.8 75.1 119.9 106.8
Decorating 100 103.0 112.8 116.2 106.5 107.5 111.0 116.6 106.0 102.5 56.3 108.5 99.5
Tools 100 104.2 109.6 110.1 104.7 103.0 100.2 101.4 96.0 90.3 41.0 94.4 90.7
Workwear & Safetywear 100 110.9 97.3 100.6 110.9 103.2 98.3 105.0 117.9 129.1 67.5 113.7 113.3
Ironmongery 100 117.8 122.3 123.7 115.8 120.5 122.6 124.8 113.8 112.7 65.0 123.2 112.6
Landscaping 100 91.4 155.5 140.6 98.7 105.6 157.4 142.5 95.3 102.6 138.8 175.5 112.1
Plumbing, Heating & Electrical 100 129.5 120.1 117.2 128.1 129.2 115.8 120.1 125.8 121.0 53.9 104.6 116.0
Renewables & Water Saving 100 77.1 73.2 68.7 63.6 71.2 66.3 76.7 68.3 79.2 31.5 66.4 62.6
Kitchens & Bathrooms 100 114.6 116.3 117.6 110.6 115.9 114.8 121.4 114.6 111.9 48.4 111.6 109.8
Miscellaneous 100 113.9 115.7 112.4 110.1 116.5 116.6 127.4 115.0 129.5 63.3 111.0 108.6
Services 100 98.9 117.3 116.1 106.4 98.8 113.9 118.3 107.7 102.0 72.8 115.9 107.3

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

Quarterly Overview - Q4 2020

Everything noteworthy about the year 2020, the pandemic, and the lockdown has already been said. However, a final review of this year highlights just how well the sector has bounced back from the April lockdown.

During Q2 the economic outlook for the remainder of 2020 seemed perilous, but a combination of RMI activity plus relaxed restrictions in Q3, followed by Brexit uncertainty combined with anticipated stock shortages in Q4 turned the ship. The final annual result of a -10.7% value decline seems a lot more palatable taking all of the above into consideration.

After Q2 2020 saw a decrease of -38.6% in value against Q2 2019, Q3 bounced back to see an increase of 1.0%. This positive trend continued into Q4, where growth of 5.4% was seen against Q4 2019. These results therefore paint a tale of two halves in 2020. The first half of the year was down by -23.9% against 2019, with the second half up by 3.0%. Landscaping was the only category to see annual growth against 2019, increasing by 5.4%.

Q4’s positive activity was driven by a combination of Timber & Joinery and Landscaping, with these respectively increasing by 12.7% and 22.9% in value against Q4 2019. The Timber & Joinery growth in Q4 was predominantly driven by Timber, with the well documented stock shortages a key driver. Heavy Building Materials also saw a positive trend, increasing by 4.3%.

Interestingly, all other categories saw a decline which could be reflective of the emphasis on essential services and by extension core building materials. These more lightside orientated categories continuously decreased each quarter with Tools and Kitchens & Bathrooms the most affected, seeing annual decreases of -20.2% and -18.1% respectively.

2021 provides realistic hope of a return to normality and an expected economic upswing. Brexit is done and dusted and enables more long-term planning, while the previously mentioned digital transformation of the trade sector should continue at a strong pace.

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