The second quarter builders’ merchant sector is a continuation of wider market trends, seeing challenging economic conditions and a pessimistic short-term outlook. The change in government early in Q3 was expected, with difficult decisions laying ahead in balancing increasing debts and well documented challenges.
Against this backdrop the second quarter is down by -5.8% in value versus 2024 Q2, which is an improvement on the -7.2% decline seen from 2023 Q1 to 2024 Q1. Volume was down by -7.2% with price growth sitting at +1.5%. The largest category, Heavy Building Materials, saw one of the largest value declines at -8.4%, driven by a volume decline of -19.6%. Price growth for Heavy Building Materials came down again, dropping from +3.5% in 2024 Q1 vs 2023 Q1 to +2.4% in 2024 Q2 vs 2023 Q2. Areas of stronger performance were seen in Aggregates, Plaster and Roofing Products, while Bricks and Blocks continued to be some of the more negatively affected areas.
The other main category, Timber & Joinery, saw a Q2 value and price growth decline of -7.4% and -12.9% respectively. Volumes continued growing at +6.3%, which was an improvement against the Q1 growth rate of +4.9%. Sheet Materials contributed more to the negative value growth in Timber & Joinery compared to Timber.
While Landscaping, the third largest category, was down in value by -5.7% most of the smaller categories saw growth in Q2. Workwear and Safetywear saw the most growth, up by +15.6% in value. Tools and Decorating were up by +5.9% and +3.6% respectively. Renewables and Water Management saw the largest value decline at -28.5%, while Plumbing, Heating and Electrical was only down by -0.5%.
There has been some positive communication by the new government related to construction and new house building, but only time will tell if these ambitions are to be met. In the short term there are concerns about a potential US recession, which could grind any short-term positivity to a halt. Unfortunately, this will likely have a negative effect on both Q3 and Q4 results.
