Builders Merchants See Strong Sales for Q3
Q3 2017 Sales performance was strong for builders merchants according to The Building Merchants Buildings Index (BMBI). The following has been taken from the original article published by the BMBI.
Stronger Sales than 2016 Q3
Third quarter sales were 5.2% higher than the same period last year, despite one less trading day. The largest product sector, Heavy Building Materials (+6.0%) did slightly better than the total market, whereas the second largest, Timber & Joinery Products, was marginally below at +5.0%. Ironmongery (+8.4%), Kitchens & Bathrooms (+8.2%) and Plumbing, Heating & Electrical (+7.4%) were the strongest performers. Total merchants’ average sales per day, which mitigates for the trading day difference, increased by 6.9%.
The BMBI contains data from GfK’s Builders Merchants Panel, which analyses data from over 80% of generalist builders’ merchants’ sales throughout the UK. While the data shows a year on year increase in sales performance, the quarter on quarter comparison found that sales have slowed, with Q3 falling by -2.2%, after taking into account three more trading days than Q2.
Ahead on 2016 Year to Date
Year to date sales for the nine months January to September 2017 were 4.3% ahead of the same period in 2016. With one less trading day this year, average sales per day were actually up by 4.9%
Commenting on the results, John Newcomb, BMF CEO said:
“Builders merchants’ sales frequently show a small dip in Q3 after an annual peak in Q2 and this year was no exception. Builders’ merchants will point to the increase in year on year sales as a more useful indicator, but they will also be taking a keen interest in the Chancellor’s Budget speech today, to see what’s in store for housebuilding and home improvement – both key markets.
“The merchant sector has shown resilience throughout the first three quarters of 2017. We remain confident that it will continue to prosper as we approach the end of the year, and maintain that momentum into 2018.”
Richard Frankcom of GfK said:
“Builders’ merchants continue to buck the trends seen across most areas of the retail market. However, we saw a steady rise in inflation during Q3, starting in July at 2.7% and rising to 3.0% by September, which led to the first rise in interest rates since July 2007.
“As we have only been tracking the data used in the BMBI for 39 months, we are yet to fully appreciate the correlation between merchant sales and wider economic indicators. Will we see a slow down over the coming months, or will the UK’s demand for new or upgraded properties continue to drive this sector? Only time will tell.”
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