A strong finish for Merchants in 2016

“2016 was a successful year for generalist builders’ merchants, with revenues of over £5.44bn and sales value growth of 5.2% on the previous year”, said Ricky Coombes, Channel Manager at GfK, which provides the top line data for the Builders Merchant Building Index. “A strong final quarter’s performance (up 5.5% on the previous year) contributed to the overall success of 2016.

“Heavy Building Materials, the most valuable category, performed in line with the total channel. It grew 5.8% on 2015, driven by several key sub-categories, such as Roofing Products, Lintels and Plaster/Plasterboards”. Plumbing, Heating & Electrical was up 4.8%.

Kitchens & Bathrooms (+7.9% on December 2015), Heavy Building Materials (the largest category, +6.5%) and Plumbing Heating & Electrical (+4.7%) outperformed merchants generally in December 2016 compared with 2015.

Most categories sold more in Q4 this year. Landscaping performed well, up 10.3% on Q4, 2015.

The Builders Merchant Building Index was 100.9 in Quarter 4 (104.7 when adjusted for one less trading day in 2016).  Plumbing, Heating & Electrical (113.9) had the highest index.

Paul Rivett, Managing Director Heatrae Sadia, BMBI’s Expert for Water Heating says:

“Demand for water heating products held up well in Q4, as it did throughout 2016, regardless of the uncertainty created in the run up to the EU referendum and in its immediate aftermath. New private house building grew in volume, and light commercial electric water heating also did well.

“However, the devaluation of sterling after the Brexit vote is starting to affect the market, with reported price increases of up to 8%.

“At times like these, it’s important to understand the customer and continue to differentiate to add value with real innovation and strong end user benefits. In particular, products that save time and energy, and those that reduce whole life costs make a tangible difference to end users’ experience.

“Boiling water dispensers for the home and commercial premises is one product area where we expect strong growth this year. They’ve been shown to enhance employee welfare and satisfaction in the workplace. Under counter versions also provide chilled or ambient water options”.

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