Slowdown in builders’ merchants’ sales in Q2

Year-on-year

Total Builders’ Merchants’ value sales in Q2 2019 were down -1.2% against the same period last year. However, the adjusted figure, which takes into account differences in trading days, was marginally positive at +0.4%. The negative quarterly figure was heavily influenced by poor trading towards the end of the period, with overall sales in June down -8.1% compared with the same month last year.

Value sales of Heavy Building Materials (the largest category) declined by -1.6% year-on-year. Timber & Joinery (the next largest category) was down by just -0.1% over the same period. Landscaping products was the best performing category, rising by +1.2%.

Quarter-on-quarter

Compared with Q1 2019 the picture is more positive, with Total Builders’ Merchants’ sales in Q2 2019 up by +8.9%. Average sales a day (which takes into account the difference in trading days) were up +12.5% over the same period. Timber & Joinery increased by +5.2%

Index

June’s total BMBI index was 117.2. The index for Timber & Joinery products was marginally higher at 118.3.

Nigel Cox, Managing Director Timbmet and BMBI’s Expert for Timber & Panel Products comments: “The second quarter saw weaker year-on-year growth in the demand for timber and panel products, although the product sector continued to outperform many. It was inevitable that stockpiling would occur prior to 31^st March and this impacted on the second quarter’s performance. Political and economic uncertainty is continuing, and consumer confidence is low, and little will change over the coming months with the current No Deal Brexit rhetoric.

“The Timber Trade Federation (TTF) recently reminded members of the risks that a No Deal Brexit will bring. Their guidance will help contingency planning as we consider the actions to mitigate the impacts of exiting with no terms. While we should expect delays, as shipments clear ports, product availability shouldn’t be a concern.

“The global markets for hardwood are still fragmented. Trade conflicts between the USA and China continue to build, and there has been a weakening of demand for European supply. Availability across the species is good although many mills are managing their output with lower demand, specifically from China. African timber supply has improved over recent months with increasing demand for sapele.

“Medium Density Fibre board (MDF) and Oriented Strand Board (OSB) availability is much improved on last year. Availability during the quarter was strong and is forecasted to continue. Similarly plywood availability remains good. The concern, regardless of product, will be the impact caused by a volatile exchange rate.”

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