Q4 Builders' merchant sales show year-on-year growth
Published: 23 February, 2016
The latest sales figures from GfK's Builders Merchants Panel, released by the Builders Merchants Federation (BMF) in the Builders Merchants Building Index, show sales in Q4 2015 through the UK's general builders' merchants were up on the same quarter in 2014.
Q4 2015 was 3% ahead of the same period last year, with sales ex-VAT of £1.21bn.
The positive results continue when comparing the second half of 2015 with the last six months of 2014, as this shows a 2.8% increase in sales. For the whole year, GfK's Builders Merchants Panel recorded £5.15bn sales ex-VAT in 2015.
Sales in most building materials categories increased year-on-year in Q4. Heavy building materials (which account for 46% of sales through general builders' merchants annually) were up by 2.9%, while timber and joinery products (which account for 21% of annual sales) were up by 3.1%.
Sales of landscaping products increased by 7.9%, ironmongery by 7.8%, plumbing, heating and electrical by 6.4%, decorating products by 3.9%, and kitchens and bathrooms by 1.3%.
Renewables and Water Management, a small but volatile category, recorded one of the largest year-on-year downturns of -11.2%. However, comparing Q4 to Q3 2015, it was one of only two categories where sales increased, up by 9.7%. Plumbing, heating and electrical also showed a quarter-on-quarter increase, of 4.7%.
Overall, Q4 on Q3 2015 results were impacted by seasonal changes and reduced trading days, with Q4 2015 total sales values down -12.4%, on Q3. Adjusting for the number of trading days in both quarters gives a sales trend of -5.6% Q3 to Q4. However, it is worth noting that Q3 2015 was the strongest quarter since GfK started tracking builders' merchants sales 18 months ago. Q4 2015 also began strongly, with October outperforming September sales figures by 0.5%.
BMF managing director John Newcomb said: "GfK's Builders Merchants Panel started in July 2014 and we now have 18 months of data. The Q4 2015 results complete our first full calendar year. We can clearly see an upward sales trend emerging year on year. Although the seasonality of the building year is reflected in the latest figures, Q4 continued the trend of growing faster year on year than the UK average level of 2.4%, and also out performed retail volume growth of 2.6%."
Additional Insights from GfK are also positive. Property transactions are returning to 2007/08 levels, assisted by a greater willingness on the part of financial institutions to lend to individuals, and average house prices are increasing.
Mr Newcomb added: "2016 has started well and, despite concerns over the global economy and the prospects of an in-or-out EU referendum, the CPA is forecasting growth driven by housebuilding and infrastructure. On balance, builders' merchants are likely to be as busy in 2016 as they were in 2015."