After a robust second quarter, sales through UK builders’ merchants continued to deliver value growth in Q3 2018, rising by 4.2% on the same period in 2017. July provided the strongest year-on-year growth, tailing off slightly as the quarter came to an end.
Timber and Joinery showed the highest value growth across the quarter with a year-on-year increase of 9.6%. This was driven by sheet materials and timber items such as carcassing, battens and trusses.
Landscaping, helped by a warm dry summer, saw sales rise 7.8% year on year with decking, tools and watering showing the strongest growth.
Quarterly sales in the Plumbing, Heating and Electrical category were up by 3.4% year on year. Dig deeper and the category showed mixed results, as a positive quarter for boilers was pulled down by a negative one for Electrical and Lighting.
Heavy Building Materials, the largest category, had a slower quarter than some with sales value growth of 2.4% on Q3 2017.
The Kitchen and Bathroom and Decorating categories both grew by 2.1% year on year.
The figures are taken from the BMF’s Builders Merchants Building Index (BMBI) that contains data from GfK’s Builders Merchants Panel which analyses 80% of generalist builders’ merchants’ sales throughout Great Britain. While the data confirms a year-on-year increase in sales performance, the 2018 quarter-on-quarter comparison found that the market has slowed, with average sales a day in Q3 falling by -3.4% from Q2. However, this is not untypical in the builders’ merchants’ cycle and year to date sales for the nine months January to September 2018 were 4.0% ahead of the same period in 2017.
Our Sales & Marketing Director and BMBI Expert, Mike Tattam, comments:
“After a relatively strong second quarter, BMBI Q3 kitchen and bathroom sales were disappointing. Sales started well but weakened during the period. Compared with the same three months in 2017, value sales were up just 2.1% against total builders’ merchants’ sales, 4.2% ahead. But comparing the 12 months to September 2018 with the same twelve months in 2017, there was little divergence (up 4.5% against total sales up 4.6%).
“New Build housing is up with very good prospects, but housing moves are down, affected by uncertainty and ceaseless media criticism of the Government’s handling of the Brexit negotiations.
“Kitchens and bathrooms RMI sales appear no better or worse than overall builders’ merchant sales. But in more visible, higher value home improvements such as kitchens, bathrooms, hard landscaping, windows, doors and conservatories which visibly enhance the value of a property, sales are a composite of two different, diverging markets. At the premium, upper-end of the market sales are relatively untroubled by weaker economic forces, while Mrs May’s JAMs, the Just About Managing middle and lower sectors of the market, struggle to fund the improvements they need.
“In the last 20 years, the over-55 homeowners have seen their housing wealth rise as house prices boosted their value. Largely mortgage free, they own the bulk of UK savings and many enjoy secure pensions. These homeowners – the Haves – drive premium sales in most home improvement markets, and across home improvements the premium is expanding while the middle and budget are contracting. Most innovations and product enhancing developments are designed for them. They buy the improvements they want, when they want, because they can. Younger homeowners, often with far higher incomes, have competing priorities and higher outgoings, leaving far less to spend on the home.
“Whatever happens in the aftermath to Brexit, the Haves, particularly the over 55s, will be relatively unaffected. Even in doomsday scenarios where house prices lose a large part of their value, they remain house-wealthy with their savings and pensions intact. It’s a safe bet that the premium market sector continues to grow strongly with a demand for style, design and additional functionality.”
To download the Q3 report or for more on our industry Experts, visit www.bmbi.co.uk