The BMF’s Builders Merchants Building Index (BMBI) latest report on sales of building materials in the UK underscores the growing impact of price inflation on the sector.
The value of sales in the first quarter of 2022 was up by +17.7% against Q1 2021. Almost all of this was driven by price increases with volume rising by just +1.5%. And while the figures indicate a continuing demand for building materials, they also confirm price inflation as a critical issue, with the impact of rising energy, fuel and raw material costs on product price clear to see.
Q1 2022 vs Q1 2021
Drilling down to year-on-year performance comparisons for the three largest product categories, the largest – Heavy Building Materials – increased +17.4% by value, but +5.0% by volume. This category includes many energy-intensive products, and bricks, blocks, cement, plasterboard and roofing products all saw their highest quarterly prices to date.
Timber & Joinery products have been even more affected by fluctuating prices over the past 12 months. Year-on-year results show sales value up by +21.4%, with volume down by -11.3%, a price increase of 36.9% over Q1 2021. However, this must be tempered by the fact that Q1 2022 Timber & Joinery prices decreased by -6.7% against Q4 2021, which may indicate that prices in this category have already peaked.
Landscaping, one of the strongest performers throughout the pandemic, saw a value increase of +14.4% against Q1 2021, with volumes down by -3.5%.
John Newcomb, CEO of the Builders Merchants Federation, said: “Taken at first sight there are some astonishing value growth figures in this quarter’s BMBI, but this must be tempered by the disparity between price and volume growth. The supply chain was already facing uncertainty before the outbreak of war in Ukraine. The conflict can only exacerbate this.
“Continuing pressure on availability coupled with rising costs for raw materials, energy and labour suggests that price inflation will be the main story of 2022.”
Emile van der Ryst, Senior Client Insight Manager – Trade at GfK, added: “Growth forecasts have been revised down across the world since Russia invaded Ukraine at the end of February. At this stage it is difficult to make any sensible prediction, but there’s an expectation that market conditions will become increasingly more difficult as prices continue to rise and consumer spend is stretched further and further.”
The Builders Merchant Building Index (BMBI) report contains data from GfK’s ground-breaking Builders Merchants Panel, which analyses data from over 80% of generalist builders’ merchants’ sales throughout Great Britain. The BMBI, a brand of the BMF, is produced and managed by MRA Research. GfK’s Builders’ Merchant Point of Sale Tracking Data sets a gold standard in reliable market trends. Unlike data from sources based on estimates, or sales from suppliers to the supply chain, this up-to-date data is based on actual sales from merchants to builders and other trades.
More information can be found at www.bmbi.co.uk
