Strong Timber & Joinery sales contribute to fourth quarter growth

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.

Quarter 4

Timber & Joinery Products was the strongest-performing category in the 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%).

The Builders Merchant Building Index was 110.6. Plumbing Heating & Electrical did best (128.1), with Timber & Joinery Products (114.7) also doing well. Ten of the twelve categories exceeded 100.

December

Timber & Joinery (+2.7%) was one of five categories that sold more in December 2018 than in December 2017. However seven categories sold less, including Ironmongery (-1.2%) and Kitchens & Bathrooms (-5.5%).

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.

Nigel Cox, Managing Director Timbmet and BMBI’s Expert for Timber & Panel Products comments: “Timber and panel product sales were good in Q4 2018. Confidence is holding up despite ever-present economic uncertainty.  Contingency planning continues for a ‘No Deal’ Brexit but there will inevitably be delays as imports get port clearance.

“Hardwood timber supply for the major species is good. North American supply, specifically white oak, has been impacted by poor weather conditions slowing logging. The African supply situation hasn’t eased and availability of sapele is short. European oak demand remains strong but there are specification issues, specifically with long lengths. Far Eastern supply has also been hit by the weather which is reflected in price increases.

“When sourced legally and sustainably, tropical hardwoods are one of best raw materials available. The announcement that Ghana is the first African nation able to export FLEGT (Forest Law Enforcement, Governance and Trade) licensed timber must be welcomed. It is a significant step forward for the industry in ensuring the future of tropical timber.

“Plywood supply is inconsistent in availability, quality and price, all of which are a concern. Following the TTF (Timber Trade Federation) plywood review, it’s important that merchants play a vital role in ensuring lasting change in the plywood sector.”