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Private housing demand fuels builders’ merchant sales growth

New data released by the Builders Merchants Federation (BMF) presents a direct contrast with the latest ONS Construction Index data.
 

Despite the ONS claiming that “construction output contracted by 0.8% in the three month on three month series in August 2017” builders’ merchants, who supply materials to the construction industry, saw sales increase by 5.8% in August compared with the same month last year. Additionally, August sales were 1.1% ahead of July, helped by one extra trading day.

Where the BMF’s and ONS data do agree is on the growth in private housing and the positive impact this is having on the construction industry.

The BMF figures are contained in the ‘Builders Merchants Building Index’ which tracks builders’ merchants’ actual sales using GfK data. The index shows growth over the past twelve months (September 2016 to August 2017) which was 4.6% higher than the previous year.

The data also states that year to date sales have strengthened and are 4.5% ahead of the same period in 2016. Ironmongery (+7.4%) and Kitchens & Bathrooms (+7.0%) were the leading performers.

The continued robust sales figures achieved by builders merchants show that, despite some predictions of a recession in the construction industry, Britain’s building materials supply chain is performing well, supporting both new housebuilding and housing renovation.

They also state that it shows demand from households to renovate their property, as shown by Kitchen and Bathroom sales being 11.1% higher in August compared to the same time last year.

John Newcomb, Chief Executive of the BMF, said: “Our latest figures show that builders’ merchants are delivering the building blocks for growth and supporting housebuilding across the country. Demand has also been fuelled by families wanting to repair, extend or adapt their homes However, there are signs that consumer confidence is slowing due to concerns over inflation which may impact private housing renovation once current projects are completed.

“In the light of this, we are pleased that the Government made further commitments to housebuilding last week. Our members are ready to work with local authorities, developers and consumers to get the right materials in the right place to build the homes the country needs.”

 

About Fiona Russell-Horne

Fiona Russell-Horne
Editor-in-Chief across the BMJ portfolio.

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