Sales figures for the first quarter of 2020 revealed in the BMF’s Builders Merchants Building Index (BMBI) reflect the negative impact of the Covid-19 pandemic and Government measures to reduce transmission of the virus.
Figures for Q1 2020 compared with Q1 2019, show a decline of -6.7% in total builders’ merchants’ sales during the first quarter of this year.
Year on Year sales were down in all three months, falling by -2.6% in January 2020 compared with January 2019, and by -1.3% in February 2020 compared with February 2019. Social distancing and lockdown measures introduced during March led to the largest decline of the quarter with sales down by -15.1% on March 2019. March sales were also down by -3.5% on February 2020.
Comparing the Q1 performance of different product categories vs Q1 2019, Tools (-12.7%) and Timber & Joinery Products (-11.1%) reported the biggest falls, with Plumbing, Heating & Electrical down -7.4%, Heavy Building Materials down -6.5%, Decorating down -5.1% and Kitchens & Bathrooms down -4.1%. Perhaps not surprisingly, the one outstanding performance was in Workwear and Safetywear up by +24.2%.
The BMBI uses GfK’s point of sale tracking data drawn from over 80% of builders’ merchants’ sales throughout the country, making it the most reliable source of data for the sector.
The quarterly BMBI figures paint a slightly less negative picture than Office of National Statistics’ (ONS) first quarterly estimates for Q1 2020, which showed Private Housing RMI work – a mainstay of builders’ merchants’ sales – down by 14.6% compared with Q1 2019 , having dropped 18.6% in March 2020 vs March 2019 and by -8.6% vs February 2020. The decline in the first quarter reported by the ONS is the largest since data was first published in Q2 2012.
Commenting on the BMBI results, John Newcomb, CEO of the Builders Merchants Federation said: “In the current circumstances no-one will be surprised by the results for Q1, with confidence dropping as coronavirus spread across the world to the UK and many building sites and builders’ merchants shutting down completely when the lockdown took effect on 24 March.
“Sites are now beginning a gradual return to work whilst maintaining enhanced safe working practices. Although this demonstrates the construction industry’s desire to assist in the recovery of the UK economy, with contractors reporting a slump in new orders and reports of projects being postponed it is far too early to say how long that recovery will take.”
Emile van der Ryst, Senior Client Insight Manager – Trade at GfK added: “With at least one week of trading lost, it comes as no surprise that March saw a noticeable decrease in sales. The true effect of the lockdown will only become known once April data becomes available, with the path to recovery being a long journey with no clear end destination.”
“The next few months will be a key indicator as to how well the industry will adapt to a new normal, with there being an acceptance that online merchant sales will see further growth going forward.”