Another strong set of results for the final quarter of 2016 completed a further year of growth in sales of building materials through UK builders’ merchants with figures from the BMF’s Builders Merchants Building Index Q4 report showing that generalist merchants generated annual revenues in excess of £5.44bn and sales value growth of 5.2% on 2015.
The BMBI report shows total merchant sales in Q4 2016 were up 5.5% on the same period in 2015. A mild, dry autumn extended the season for external works. Landscaping (up 10.3%) and Heavy Building Materials (up 7.1%) were the two best performing categories in Q4, the latter driven by several key sub-categories including roofing products, lintels and plasterboards/plaster products.
Two further categories outperformed the total market in Q4 — sales of Kitchens and Bathrooms increased by 5.9% year on year and Ironmongery rose by 5.6%.
With five fewer trading days in Q4 vs Q3, total quarter on quarter sales were, as expected, lower across most categories. However, Plumbing Heating & Electrical and Workwear & Safetywear — two categories directly affected by colder or wetter weather — saw quarter on quarter growth of 8% and 6.1% respectively.
GfK’s Builders’ Merchant Point of Sale Tracking Data, which represents over 80% of the value of the builders’ merchant market, is used to create the Builders Merchant Building Index of actual sales to builders.
The BMBI report shows total merchant sales in Q4 2016 were up 5.5% on the same period in 2015. A mild, dry autumn extended the season for external works. Landscaping (up 10.3%) and Heavy Building Materials (up 7.1%) were the two best performing categories in Q4, the latter driven by several key sub-categories including roofing products, lintels and plasterboards/plaster products.
Commenting on the results, BMF Managing Director John Newcomb said: “Despite fears around the Brexit vote mid-year, another strong set of results for the final quarter is certainly encouraging. In addition to GfK’s national data in the BMBI report, the BMF’s own Sales Indicators — which confirm that the final quarter of 2016 wrapped up three years of growth in the sector — provide a valuable insight into regional sales. It is interesting to note that some of the highest percentage increases are currently occurring outside London and the South East, which are normally considered the busiest areas.”
John continued: “Looking forward, we also found a largely optimistic sentiment in the first post-Brexit State of Trade survey of BMF members, with the majority forecasting further growth in Q1 2017. Against this, however, respondents cited economic uncertainty as the largest expected constraint on sales over the next 12 months, along with uncertain future demand and the impact of rising prices.”
GfK Channel Manager Ricky Coombes believes that consumer confidence levels provide a good indicator of potential future spend on areas such as property and home improvements, which directly impact builders’ merchant sales. He said: “GfK’s Consumer Confidence Barometer at the end of 2016 was at the same level as post-recession 2014. Confidence is being propped up by consumers’ positive outlook on their own personal financial situation. Even though they expect price increases in 2017, these are yet to be felt.”
Summary:
- 2016 sales +5.2% on 2015
- Q4 sales +5.5% on Q4 2015
- December sales +4.0% on December 2015
The GfK Builders Merchants Panel
GfK’s data sample represents 80% of the country’s Multiple Generalist Builders’ Merchants, defined as those selling a mix of heavyside and lightside products through more than three branches or with an annual turnover of more than £3m. The panel includes national, multi-regional and regional merchants such as Buildbase, Jewson, Travis Perkins, EH Smith, Gibbs & Dandy, MKM, Bradfords, Covers and Ridgeons.
Live data confirms total annual sales for the Multiple Generalist Builders Merchants Channel to be in excess of £5.44bn.
The Builders Merchant Building Index (BMBI), a brand of the BMF
Published monthly, the BMBI is based on top line data from GfK’s Builders Merchants Panel which are compiled every month from sales turnover information from general builders’ merchants.
For more information visit www.bmbi.co.uk or follow on Twitter @TheBMBI
