Builders’ Merchants see slower rate of recovery in August

The latest Builders Merchants Building Index (BMBI) report, published in October, shows that sales to builders by Britain’s builders’ merchants have continued to recover, but at a slower pace in August compared to the previous two months.

Although total builders’ merchants’ sales were 3.9% behind August 2019, daily sales were 0.9% above last year’s level when adjusted for the difference in trading days, and some categories continued to perform strongly.

Year-on-year

Landscaping was the first category to recover following the sharp drop in April, and it has remained strong with August sales 16.3% higher than in the same period last year. Sales were boosted by homeowners spending time in lockdown and working from home, thinking of all the home improvement jobs they wanted to do. The exceptionally hot weather helped too.

Despite seeing a 25% decrease in sales compared to July, Workwear & Safetywear exceeded August 2019 sales by 1.8%. The remaining nine categories were weaker year-on- year, including the largest category; Heavy Building Materials, which fell 5.8%.

Sales in June to August were down only 1.0% compared with the same three months in 2019, on one more trading day. Landscaping was strongest with a 30.9% increase compared to the same quarter last year. Workwear & Safetywear and Timber & Joinery products also saw positive growth.

Quarter-on-quarter

Total sales were up 73.8% in June to August compared with the previous three months (March to May), when many merchants had closed branches as a result of the Covid-19 lockdown. Six categories did better over this period, led by Tools (+124.1%).

The continued recovery and the strength of a number of individual product groups demonstrates the resilience of the sector. However, while good weather and people spending more time in their homes have had a powerful impact on recovery; sporadic material shortages, caused by the sudden strong rebound, have tested capacity and put a brake on stronger growth.

Month-on-month

Total Merchants sales were 14.2% lower in August compared to July, which had three more trading days. All categories sold less, with Heavy Building Materials at -13.5%. Kitchens & Bathrooms sales were least affected (-4.3%). Adjusted for trading days however, total sales were only 1.3% lower in August than July.

Year to Date

As expected, sales were down on a year-to-date basis compared with last year. In the first eight months of 2020, total sales were 18.4% lower than in January to August 2019. Workwear & Safetywear was the only category that sold more in 2020.

Index

August’s BMBI index was 113.3. Landscaping was strongest at 157.2, followed by Timber & Joinery Products at 120.6.