A good November for merchants

Builders’ merchants’ sales to roofers, builders and contractors increased year on year for the seventh consecutive month. Total Builders’ merchant value sales were up 7.3% in November 2017 compared with November last year, on the same number of trading days. Seven categories did better, including Landscaping (+9.0%), Ironmongery (+8.2%), Tools (+8.0%), Heavy Building Materials (+7.8%) and Timber & Joinery Products (+7.5%). Workwear & Safetywear (-1.6%) was the only category to sell less year on year.

Compared with October (which had the highest-ever BMBI revenue), sales in November were 1.4% lower. Six categories sold more, including Plumbing Heating & Electrical (+10.1%) but Timber & Joinery Products did less well (-1.9%).

The latest three months (September to November) were 6.7% up on the same three months in 2016, with an equal number of trading days. Plumbing Heating & Electrical (+8.7%), Tools (+8.5%), Heavy Building Materials (+7.6%) and Timber & Joinery Products (+7.0%) were among six sectors that grew more strongly. All categories saw gains.

Year-to-date sales (January to November) were 5.1% ahead of the same period last year with Timber & Joinery up +5.6%.

John Sinfield, Managing Director Knauf Insulation, BMBI’s Expert for Mineral Wool Insulation says: “The housing crisis rages on. Low supply is hamstringing first-time buyers’ ability to get on the ladder. As a result it’s garnering even larger political focus, with further commitments from Government to boost both supply and demand through the extension of the Help to Buy equity loan.

“Housing is a key market for the insulation industry and high targets for the delivery of new homes have been a key driver for sales this year. We have seen annual growth in our mineral wool insulation for cavity wall application as well as quarterly growth in glass mineral wool sales. The government’s commitment to Help to Buy is going to maintain demand for mineral wool products into the future.

“Of course the key challenge the entire industry faces in meeting housing need is the availability of skills. Brexit’s effect on the value of Sterling is already removing the incentives to come to the UK to work. For the many construction workers from Eastern Europe living here who send money back home, working in the UK simply gives them less money than they once had. And, should we be faced with a deal that halts immigration, the issue will only become more acute.

“Given the uncertain climate, innovation is going to be the name of the game for businesses seeking to maintain strong sales”.

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