A stronger July for merchants

July’s Builders Merchant Building Index (BMBI) showed builders’ merchants’ sales to roofers, builders and contractors were up 7.0% in July 2017 compared with the same month last year. Ironmongery (+13.1%) was the strongest category and Timber & Joinery Products (+7.5%) did a little better than merchants generally.

With one less trading day than June, July was 0.9% lower but average sales per day in July were 3.9% higher.

Year to date sales strengthened, with the first seven months of 2017 4.3% ahead of the same period in 2016 – up from +3.8% YTD in June. The rolling 12 month period, August 2016 to July 2017, was 5.2% ahead of the same period a year earlier, helped by two additional trading days. Timber & Joinery Products (+5.1%) was in line with merchants overall. Average sales per day over the 12 months were 4.3% up.

July’s Builders Merchant Building Index was 119.2 (117.8 adjusted for trading days) and all categories except two had indices over 100.

John Sinfield, Managing Director Knauf Insulation, BMBI’s Expert for Mineral Wool Insulation says: “The markets for glass and rock mineral wool remain robust following strong sales in the six months to June. We saw between 5-7% growth in Q2 compared with the same period last year, despite some uncertainty across the construction sector.

“A hung parliament has done little to moderate the uncertainty caused by the ongoing Brexit process, but there now appears to be a stronger opposition. That’s helpful when it comes to the debate surrounding issues like energy efficiency and housing policy.

“With EU negotiations under way, inflationary pressures caused by the weak pound will lead to the continued high cost of importing both finished goods and raw materials. This upward pressure on price exacerbates the wider raw material shortages that continue to affect parts of the industry.

“The insulation market has been under the spotlight like never before following the Grenfell Tower fire. Perhaps understandably, we have seen a marked increase in enquiries about the fire performance properties of our products. The industry is participating fully in the groups set up by DCLG in the wake of the fire, and it is to be hoped that those groups result in well thought through changes to current regulations.”

BMBI Experts speak exclusively for their markets, explaining trends, issues and opportunities.