The builders’ merchant sector continued to struggle in Q3, as part of the wider economy, influenced by uncertainty of the direction taken by the new government, and continuing global tensions. However, merchants are noting the first signs of positive sentiment, which means the sector could start returning to growth in the second half of 2025.
A quarterly decline as a main indicator supports this, with the most recent quarter down -2.6% against 2023 Q3, the lowest level of quarterly decline since the start of 2023. Price growth has essentially come to a standstill, only increasing by 0.2% while volume is only down by -2.8%.
Both Heavy Building Materials and Timber & Joinery declined more than the overall figure of -2.6%. The former saw value decline by -3.5%, with volume down by -3.9% and price growth of +0.4%. There are a couple of notable trends within this category that stand out from a Q3 perspective, such as larger than average declines for Blocks, Bricks, Insulation and Plasterboard. However, both Aggregates and Plaster bucked this trend, seeing growth. Timber & Joinery recorded a value decline of -4.8%, with Sheet Materials contributing to most of this. Timber performed better than expected, with quarterly growth for Flooring & Flooring Accessories.
There was a small decline of -0.3% in value sales for Landscaping, positively influenced by growth for both Decking and Fencing & Gates. The four smaller categories of Decorating, Services, Tools and Workwear & Safetywear all saw growth compared to 2023 Q3, with the latter up by 16.5% in value. Kitchens were down by -6.1% in value, while Renewables & Water Management was the only area to see any major struggle, decreasing by -29.1% in value.
The remainder of the year will continue to be challenging, with the reelection of Donald Trump in the US adding another layer of uncertainty for 2025. The budget at the end of October has had a frosty reception, but at least gives more certainty around planning and how to approach the next year. It is, however, again worth emphasizing the point that merchants are starting to note the first signs around positive sentiment, so the sector has some potential light at the end of the tunnel.
