Following the Prime Minister’s visit to Brussels and ongoing talks in a final bid to agree a trade deal with the EU, the Builders Merchants Federation’s latest Builders Merchants Industry Forecast Report presents a “lacklustre” picture if no trading deal is concluded.
The report analyses the key factors affecting builders’ merchant activity to project future sales from October 2020 to the end of 2021. Against the turbulent combination of Covid-19 and Brexit both the final quarter of this year and the coming year prove difficult to forecast.
The sector remains resilient but overall confidence is subdued with Government restrictions still in place, resulting in the forecast for an 11.1% decline in average year-on-year growth for 2020.
The outcome of the Brexit trade talks dominates the forecast for 2021, with the Report analysing two scenarios, the first based on Brexit with a deal, the second on Brexit without a deal.
Under the first scenario, Quarter 1 2021 performance shows strong growth (+8%) if a trade deal is agreed, alongside the implementation of the Covid vaccination programme helping to boost confidence. However, Q1 2021 growth is limited to +3.3% under the no deal scenario.
The forecast shows the outcome of the trade deal affecting sales during the whole of 2021. Against the backdrop of a poor performing 2020, the forecast with a trade deal shows encouraging growth of 16.8%, but a more pessimistic increase of 12.5% if no deal can be concluded.
This edition of the Builders Merchants Industry Forecast also includes an overview of economic performance and the valuation of the European Builders Merchants market alongside the impact of Brexit on immigration and employment.
A PDF edition of the Autumn Covid-19 Special edition Builders Merchants Industry Forecast 2020 – 2021 can be purchased for £250 + VAT.
Contact Nyssa Patel, BMF Industry Analyst/Economist on 02476 854994 or email nyssa.patel@bmf.org.uk
