UK building product sales show resilience

The latest data released by the Builders Merchants Building Index (BMBI) confirms a continuing positive trend for UK builders’ merchants with Q2 sales increasing by 5.3% (when adjusted for two fewer trading days in period) compared to Q2 2016. Unadjusted Q2 year on year sales figure is still positive at +1.9%. Year to date sales figures to June are 3.8% higher than for 2016, the same number of trading days.

The BMBI tracks builders’ merchants’ sales to builders and contractors using GfK’s Builders’ Merchant Point of Sale Tracking Data. The BMBI includes actual sales over 80% of the value of the builders’ merchants’ market.

The Q2 results appear to tell a different story to the trend reported by the Office of National Statistics earlier this month, in which they report actual sales representing overall construction output fell by -1.3% in the three months to June compared with Q1, and rose by just +0.4% on the same period last year. This may reflect the predominance of housebuilding and domestic repair, maintenance and improvement work carried out by builders’ merchants’ customer base.

Commenting on the results, John Newcomb CEO of the BMF said “The majority of trade indicators are finding that order books are being sustained by private housing and Repair Maintenance and Improvement (RMI) work while commercial sectors are falling behind. Even the ONS reported a year on year increase in house building of +9.4% for the quarter.

“The merchant sector is showing resilience at the moment, but it would be foolish not to consider the possibility of tougher trading conditions as we move into 2018.”