PRICE DRIVES MERCHANT SALES GROWTH IN Q3

The BMF’s Builder Merchants Building Index (BMBI) latest report on sales of building materials in the UK reflects the undercurrent of economic uncertainty evident throughout the third quarter of the year, with almost all market growth coming from pricing.

While total sales in Quarter 3 2022 were up by +4.3% on Q3 2021, sales volumes fell by -9.0%,and prices increased by +14.6%. With one less trading day during Q3 2022, like-for-like sales values increased by +5.9%.

Timber & Joinery and Landscaping were the only categories to sell less this quarter, with sales values down by -11.1% and -1.3% respectively.

The other major trend was the price growth of the largest category, Heavy Building Materials, up by +21.2%, with Aggregates, Cement and Plasterboard some of the main contributors.

Kitchens & Bathrooms (+17.2%), and Plumbing, Heating & Electrical (+14.2%) were among the categories which grew faster than Merchant sales overall. These were led by the smaller categories of Renewables & WaterSaving (+38.4%) and Workwear & Safetywear (+23.6%)

Total sales in Q3 were -2.2% lower than in the previous three months. Sales volumes fell by-5.5% and prices increased by +3.5%. However, with four more trading days during the latest quarter, overall like-for-like sales were 8.3% lower than in Q2 2022.

Year to date indicators for 2022 show both Timber & Joinery (+0.6%) and Landscaping (+0.5%) remaining almost flat in value, with volume declines of -17.8% and -13.5% respectively, counteracting price growth. Sales volumes were down by -4.0% for Heavy Building Materials, with value up by +12.6%. All three categories have seen year on- year price growth of between 16-22%. John Newcomb, CEO of the Builders Merchants Federation said,

“We have seen a pattern emerge throughout the year with sales value increases largely driven by price inflation rather than volume growth. Following the Autumn Statement, commercial and retail customers alike will increasingly feel the combined squeeze of rising prices, interest rates and taxes. This will undoubtedly feed into the next 12 months as the Chancellor’s measures to counteract recession further reduce consumer spending power.”

www.bmbi.co.uk