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Merchant sales data shows slow start to the year

24 Mar 23 Sales volumes through Britain’s builders’ merchants were down by 16.6% year-on-year in January 2023.

Thanks to high prices and an extra trading day in January 2023 compared to 2022, the amount of money passing through the tills increased, but only just.

The latest Builders Merchant Building Index (BMBI) report, which analyses point-of-sale data from over 80% of generalist builders’ merchants’ sales throughout Great Britain, reveals that total value sales were up by 0.2% in January 2023 compared to the same month in 2022. This nominal growth came largely from inflation as volume sales were down 16.5% while prices rose 19.9%. There was also an extra trading day this January, so like-for-like sales (by value) were 4.6% lower.

Nine of the twelve categories sold more in January 2023 compared to the previous year. Renewables & Water Saving ( up 46%) performed strongly, as did Decorating (up 21%) and Plumbing, Heating & Electrical (up 18%). Sales of Timber & Joinery Products were down 15% on the year, Landscaping was down 12%.

Month-on-month, volume sales were up 28.6% in January 2023 compared to December 2022 – December is always slower, due to holidays. With process up 1.9% over the course of the month, total sales takings were up 31.1% in January 2023 compared to December 2022.

However, there were five more trading days in January; daily sales were actually flat (down 0.1%).

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For the 12 months February 2022 to January 2023 to total merchant ££ sales were 5.3% higher than the corresponding period a year before. But with price inflation at 16.5%, sales volumes were down 9.6%.

Emile van der Ryst, account manager at data firm GfK, which crunches the numbers, said: “Market turmoil in the past year has now reached the stage where some of the monthly figures need further context. This month, January-on-January sees a +0.2% value increase, with a -16.5% volume decrease and a +19.9% price increase. Logic dictates that value should therefore be around +3-4% if volume and price are balanced against each other. This month is however affected by Heavy Building Materials, Timber & Joinery and Landscaping distorting the total market view.

“These three categories combined make up around 75% of total market value, and therefore heavily influence topline trends. But they are each quite different in the mix. Heavy Building Materials has one of the lowest average prices of the categories but has seen a larger than market average price growth. At the same time, Timber & Joinery has one of the highest average prices, but has seen lower than market average volume declines, with prices declining against rampant total market inflation. Finally, Landscaping is a key volume driver in the market, but has seen a larger than market average seasonal volume decline. These factors in combination occasionally create hard-to-understand distortions, unexpected anomalies in topline trends which need to be seen in context.

“We expect these trends to continue through 2023 and into the first half of 2024 as inflation, demand and supply gradually return to a more normal stability.”

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MPU
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