British builders merchants saw increasing sales in the second quarter of 2017, new data has shown.
The BMF’s Builders Merchants Building Index (BMBI) reported a 5.3% rise in Q2 sales, compared with the same quarter a year earlier.
When adjusted to take into account the fewer trading days (61 compared with 63 in 2016), the year-on-year sales figure was still positive at 1.9% growth.
In the year to June, sales figures were 3.8% higher than for 2016.
The majority of product areas performed well, although kitchens and bathrooms led the way with an increase of 8.3%, alongside ironmongery, which grew by 8.4%.
Sales of plumbing, heating and electrical products also showed growth at 3.8%, however this increase was lower than the total builders merchant channel.
However, the quarter-on-quarter results showed that overall construction output fell by 1.3% in the three months to June, compared with Q1, and rose by just 0.4% on the same period last year.
The BMF suggested this could reflect the predominance of house building and domestic repair, maintenance and improvement work carried out by builders merchants’ customer base.
John Newcomb (pictured), BMF chief executive, said: “The majority of trade indicators are finding that order books are being sustained by private housing and RMI work – the mainstay of many a merchant’s business – while commercial sectors are falling behind. Even the ONS reported a year-on-year increase in housing of 9.4% for the quarter.
“I have visited over 20 BMF members in recent weeks and every one reported sales growth in the first half. While they have seen little evidence of a slowdown in overall sales, they are reporting more price increases – an inevitable result of the falling exchange rate – and shortages in certain product areas. The merchant sector is showing resilience at the moment, but it would be foolish not to consider the possibility of tougher trading conditions as we move into 2018.”
Richard Frankcom, GfK senior account manager, trade, added: “Once again the builders merchants deliver great year-on-year sales value growth across the first six-months of 2017, coming from a variety of product categories. However, we cannot ignore the contribution that increased costs and price increases have had on this continued value growth.
“Going forward, we urge the industry to keep a close eye on trends impacting consumers’ ability to carry out renovations and improvements. Bank interest rates and real wage trends impact consumers’ ability to finance home improvements or house moves. We have just seen a significant drop in intentions to invest in home-related projects, which could be felt by the merchants as early as the end of this year. However, home-improvement projects could still be one of the best investments homeowners and landlords can make right now. The encouragement and evidence for them to do so needs to come from somewhere during these uncertain economic times.”