Writing in the January 2023 issue of PBM, Editor Paul Davies reflected on the turmoil of 2022 and considered the challenges of the coming 12 months.
Following the turbulence of the Covid pandemic, one could surely be forgiven for hoping that 2022 would deliver a much-needed period of stability. In our January column last year for example, we expressed our “high hopes for the construction sector” for the year ahead, and how “most industry metrics maintain an upward trajectory (with) trade customers across all disciplines reporting sustained demand for their services.”
Furthermore, we optimistically noted how there were also “burgeoning signs that some of the supply side problems are beginning to ease.”
One short month later however, and we were discussing the growing prospect of Boris Johnson’s defenestration as Prime Minister and made an early reference to an emerging cost of living crisis. Already rising energy bills were then sent stratospheric by Russia’s illegal invasion of Ukraine; an act of war that reverberated through the global economy in myriad ways.
Putting pen to paper here in mid-December, the conflict and its shockwaves continue. Domestically, we are now on our third Prime Minister of the year with Liz Truss’s catastrophic 44 days in post achieving nothing other than compounding the problems that were already beginning to negatively impact upon the economy.
Rampant inflation and soaring energy prices, alongside rising interest rates, are now hitting the nation hard. With a sustained recession a near certainty, these are undeniably challenging times for the general population and businesses alike.
So much for stability.
“Sustained uncertainty over gas and electricity prices has sharpened debate surrounding the energy performance of the nation’s housing stock and there is a clear demand for sustainable products that can help households reduce their monthly bills.”
On a more positive note, the industry’s powerful performance over the last couple of years sees it in a relatively strong position to navigate the troubles ahead. Whilst driven by price inflation rather than volume sales, the sector is still showing year-on-year growth and we continue to see numerous examples of investment across all types of merchant business.
From new branches to new vehicles, post-pandemic profits are being put to good use as merchants upgrade their facilities, improving both their systems and service offer. The lessons of lockdown mean we now see an even more agile and responsive sector, with an increasingly omnichannel approach to customer service.
Equally, and not least because of a challenging labour market, staff support is seen as vital and valued. Many merchants have been helping their teams with cost-of-living payments, recognising that a loyal, motivated and experienced workforce will be crucial to ensuring future success.
And whilst consumer belts will undoubtedly be tightened over the coming months, it is an equal certainty that opportunities will continue to present themselves. For example, sustained uncertainty over gas and electricity prices has sharpened debate surrounding the energy performance of the nation’s housing stock and, as noted in the latest BMBI stats, there is a clear demand for sustainable products that can help households reduce their monthly bills.
Merchants such as Bradfords and Robert Price have increased their focus in this area, whilst the Government has recently announced funding for a new insulation upgrade scheme. The BMF and others meanwhile continue to call for a full national retrofit programme.
The year ahead may well be difficult, but we remain confident that the UK builders’ merchant sector will yet again rise to the challenge.
