The latest Builders Merchant Building Index (BMBI) report, published in October, shows builders’ merchants’ value sales in August were down -5.6% compared to the same month in 2023. Volume sales dropped -5.7% with little movement in price (+0.2%). With one less trading day this year, like-for-like value sales were down -1.1%.
Seven of the twelve categories performed better than Total Merchants year-on-year, with Services (+2.5%), Workwear & Safetywear (+2.3%), and Decorating (+0.2%) ahead the most. The two largest categories – Heavy Building Materials (-6.1%) and Timber & Joinery Products (-8.2%) – were weaker than Total Merchants. Renewables & Water Saving was the worst performing category, falling -30.8%.
Month-on-month, August total value sales were -8.1% lower than July. Volume sales fell -9.2% and prices edged up +1.2%. All categories sold less, and just three performed better than Total Merchants: Services (-4.4%), Timber & Joinery Products (-7.4%) and Decorating (-7.5%). Plumbing Heating & Electrical (-10.0%), Renewables & Water Saving (-11.3%) and Workwear & Safetywear (-14.7%) were the worst performing categories. With two less trading days this month, like-for-like value sales were marginally higher (+0.7%).
In the 12-month period between September 2023 and August 2024, total value sales were down -5.7% compared to the same period the year before (September 2022 to August 2023). Volume sales were -8.5% lower and prices increased +3.1%. With three more trading days in the most recent 12-month period, like-for-like value sales were -6.8% lower. The two largest categories – Heavy Building Materials (-7.5%) and Timber & Joinery Products (-9.0%) – declined by more than Total Merchants, while Workwear & Safetywear (+10.4%) increased the most.
Total value sales from January to August were down -5.4% on the first eight months of 2023.
Mike Rigby, Managing Director of MRA Research which produces the BMBI report says: “August was another unsettling month for the building sector. Strong winds, heavy rains and thunderstorms undoubtedly contributed to an anaemic construction output, which increased by a meagre +0.4%, according to the latest ONS data. Overall new work was up +1.6%, refurbishment and maintenance work down -1.0%.
“Extremely gloomy Government warnings of what may be in its October 30th Budget are blamed for a sharp fall in the GfK’s Consumer Confidence Index. After holding steady in August, the index for September shows a sharp seven-point fall in consumer confidence to -20, and major hits to the way people feel about their personal finances (down -9 points) and the general economic situation over the next 12 months (down -12 points).
“While construction output and consumer confidence stats paint an underwhelming picture, the metrics from the housing market and economy paint a better outlook. UK house prices continue to climb (up +1.5% in August compared to July) and mortgage approvals were at their highest level since August 2022. Better still, inflation has fallen to 1.7%, below the Bank of England’s 2% target, and there are expectations of two further cuts to the bank rate before Christmas. There are also reports of more bulk cement being delivered to housebuilders for new build foundations, which mean more new homes and buildings in the first half of 2025.
“Will the new Government put our money where its mouth is? A lot hangs on Labour’s first budget on 30 October!”
Set up and run by MRA Research, the BMBI – a brand of the Builders Merchants Federation – is a monthly index of builders’ merchant sales, and the most reliable, up-to-date measure of Repair, Maintenance, and Improvement (RMI) activity in the UK. The index is based on actual sales from GfK’s Builders’ Merchant Point of Sale Tracking Data, which captures value sales out to builders from generalist builders’ merchants, accounting for 88% of total sales from builders’ merchants throughout Great Britain. An in-depth review, which includes commentary by sector experts, is provided each quarter.
