The ninth edition of the Builders Merchants Federation (BMF) Industry Forecast Report highlights the strength of the building materials market throughout the past year whilst painting a more uncertain picture for 2022 in the light of continuing supply chain issues and inflationary pressures.
The Forecast Report provides a detailed review of the second half of 2021 before looking forward to 2022. It combines a comprehensive analysis of merchant market performance from July 2014 to September 2021, taken from the Builders Merchants Building Index (BMBI), coupled with analysis of key factors affecting builders’ merchants’ sales to project future sales in 2022.
With BMBI Q4 2021 actual figures still to be finalised, the Report forecasts annual builders merchant sales growth of +29.2% for 2021 over the Covid-disrupted 2020 period. Looking ahead to 2022, the forecast considers three potential scenarios for the coming year:
A baseline scenario, where the current situation gradually eases through the year, with a forecasted year-on-year increase of +0.1%
A downside scenario, which considers the worsening of the ongoing availability challenges, persisting energy issues and increasing inflationary pressures throughout 2022, resulting in a forecasted year-on-year decrease of -0.9%
An upside scenario, which considers a quicker than anticipated improvement of conditions, with a forecasted year-on-year increase of +3.8%.
Commenting on the forecast, Sarup Ubhi, BMF Industry Analyst/Economist said: “The building materials industry has shown remarkable adaptability and resilience to overcome testing conditions arising from the global Covid pandemic which has now affected operations for almost two years. However, continuing domestic and global supply challenges, combined with skills shortages, rising energy prices, price inflation and rising interest, which could affect both market and consumer confidence, creates a high degree of uncertainty at this stage.
“If the issues worsen or persist building material sales across 2022 will be restricted. If the issues eventually phase out and correct itself over the year, then we will see the flat rate growth shown in the baseline scenario. However, if the issues ease quicker than expected, then we will see an even better trading year than 2021.”
The Builders Merchants Industry Forecast Report Winter 2021/2022 is supplied free to BMF members and priced at £250 for non-members. Contact Sarup Ubhi, BMF Industry Analyst/Economist at sarup.ubhi@bmf.org.uk to request a copy of the latest report or if you have any questions.
