Outlook positive despite the uncertainty

The latest Builders Merchant Building Index (BMBI) shows builders’ merchants’ sales to roofers, builders and contractors up 11.4% in March 2017 compared with March 2016. A late Easter meant two more trading days in March 2017, generating slightly artificial total sales growth. On a comparable basis, sales per trading day were up 1.7%. All categories sold more in absolute terms, with some achieving their highest year on year increase in the last 12 months, including Timber & Joinery Products (+13.0%).

March sales were up 22.2% compared with February, gaining from three more sales days, but still up +6.3% sales per trading day.

Quarter 1

March’s strong performance coupled with a warmer, drier period were key to 5.9% sales growth on Q1 2016 (+2.6% per trading-day). Tools (+8.8%) and Ironmongery (+7.2%) were the fastest growing categories this quarter. While the ability to start external works in a warmer, drier winter lifted Timber & Joinery 6.7%.

Index

March’s BMBI was 122.8 (110.8 adjusted), up from 100.5 in February.

John Sinfield, Managing Director Knauf Insulation, BMBI’s Expert for Mineral Wool Insulation, says: “We have seen a continuation from Q4 2016. Demand for mineral wool insulation products has been strong throughout Q1, helping to boost sales volumes of both Glass and Rock Mineral Wool product ranges.

“Comparing sales to the overall performance of the merchant sector, Glass Mineral Wool product sales are tracking slightly above the market, while Rock Mineral Wool sales are significantly outperforming it with good double-digit growth over the same period last year.

“The mineral wool sector is benefiting from the latest shortage of PIR, resulting from a scarcity of MDI, a key raw material. Merchants and distributors are speaking to their suppliers about alternative solutions to ensure their customers don’t experience disruption.

“Overall, it’s been a good year so far, with a decent short term outlook.”

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