They sicken at the calm that know the storm.
Confusing isn’t it? One the one hand, my inbox is full of surveys from various parts of the construction industry from the BMF to the FMB stating that the fears of a Brexit-fuelled recession are unfounded and that the industry is doing really very well.
On the other hand, there’s the trading statement a couple of weeks ago from Travis Perkins which announces the closure of 30 branches with the loss of 600 jobs. One that came hot on the heels of Wolseley’s own 800 job losses announcement.
Travis Perkins’ CEO John Carter blames the Brexit uncertainty. ”It [Brexit] is a big part of the uncertainty. If we were stood here now without Brexit I think it would have been easier to predict 2017” he said at the time.
On the grounds that we haven’t actually left the EU yet and that, therefore – with the exception of its decimation of my holiday spending funds – any real effects and consequences have yet to be felt, he’s probably more on the button than the ‘we’re all so happy happy and nothing’s been as bad as we feared’ brigade.
The national mainstream media seized upon both announcements with vigour, Travis and Plumb Center (and Jewson) being pretty much the only builders merchants they’ve heard of.
However, reading further into the trading statement, is it as bad as journalists (myself included) are making it out to be? Well, clearly, for anyone who is ‘at risk’ of being one of those 600 or who manages one of the 30 branches or works in Wolseley’s Worcester RDC then – yes. It’ pretty bad.
However, hark back to March 2015, barely 18 months ago when Travis announced the following: 4,000 new jobs and 400 new branches in four years. Back then, Carter said that it “reflects confidence in our businesses, the markets we operate in and the UK economy as whole”.
Of course that was on the back of the confidence generated by Help to Buy, certainly and was before the General Election in which Cameron made the fatal error or appeasing the UKIPly-inclined Tories by promising the referendum.
I haven’t kept as close an eye on how many of those branches and jobs have actually materialised as perhaps I should have done, but it strikes me that 600 jobs out of TP’s 28,000 across the group isn’t so very many.
There’s a phenomenon I like to refer to as “Costa-ising”. Silly, made-up word for the prolific breeding of the coffee-shop chain, which seems to need a branch on every street corner and in every petrol station.
Are we simply talking house-keeping here on the part of two of our biggest merchant businesses?
When you’ve acquired as many branches and businesses as TP has over the years, there’s always going to come a time when you have to sit down and take stock of your estate and work out which elements are really pulling their collective weight.
It’ not as though there isn’t an awful lot of investment still going on in other parts of the business – and this goes for Wolseley as well.
Brexit will, undoubtedly continue to have its effects in this industry. It may be as bad as we feared, it may not. It’s the not knowing that is the killer in terms of confidence and investment.