Builders merchants’ sales continue to rise in Q2 2016

Published:  23 August, 2016

The latest sales figures from GfK’s Builders Merchants Panel, released on 23 August, by the Builders Merchants Federation (BMF) in the Builders Merchants Building Index (BMBI), show sales in Q2 2016 through the UK’s general builders’ merchants were up both on the last quarter and on the same quarter in 2015.

The Q2 report covers the three months leading up to the Brexit decision, but despite press reports of pre-referendum jitters, builders’ merchants’ turnover was robust. Total merchant sales in Q2 were up by 6.2% on the same period last year with total ex-Vat sales of £1.44bn compared to £1.36bn in 2015. This was, however, assisted by two additional trading days in the 2016 quarter.

Year on year sales growth was particularly strong in Ironmongery (+7.8%), Landscaping (+7.7%), Heavy Building Materials (6.5%) and Plumbing and Heating and Electrical (+6.4%). Five other categories grew more slowly but still exceeded the same period last year. Only the highly volatile Renewables and Water Saving category saw sales fall.

Looking at quarter on quarter growth, total Q2 sales were 13.7% ahead of Q1, driven by Landscaping in its peak season (+58.1%) and Heavy Building Materials (+14.8%), the latter being the largest single category accounting for almost 45% of all builders’ merchant sales by value.

The actual BMBI for Q2 2016 – which for the first time we have been able to calculate using the more reliable 12-month base point – was 113.6, its highest level over the past four quarters.

Commenting on the data, John Newcomb, managing director of the BMF, said: “Economic and political uncertainty in the run-up to the EU referendum was expected to cause a slow-down in the construction sector. However, sales data from the Builders Merchants Panel is telling a different, and far more positive, story.

“That said, the BMBI report includes various macro indicators supplied by GfK including a dramatic post-Brexit 11 point drop in consumer confidence in July. But with the Bank of England reacting quickly on borrowing rates, and the continuing need for housing this may be no more than a blip. The pattern will become clearer in the autumn when we have the Q3 figures to hand, but in the meantime we remain confident that the market will continue to perform strongly.”

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