BUILDERS MERCHANT BUILDING INDEX – Q4 December 2023 REPORT RESULTS

Builders’ Merchant Q4 value sales down -5.7% year-on-year. Volumes fall -12.0%

The latest Builders Merchant Building Index (BMBI) report reveals builders’ merchants’ value sales in Q4 2023 were -5.7% down compared to Q4 2022, with volume sales falling -12.0% and prices rising +7.1%. With one more trading day in Q4 2023, like-for-like sales (which take the number of trading days into account) were -7.3% down.

Year-on-year, half of the twelve categories sold more in Q4 including Workwear & Safetywear (+8.6%) and Decorating (+7.1%). However, the three largest categories all sold less: Landscaping (-6.7%), Heavy Building Materials (-7.3%) and Timber & Joinery Products (-10.3%).

Quarter-on-quarter, total value sales for Q4 were down -15.7% compared to Q3. Volume sales fell-19.8% while prices rose +5.1%. With four less trading days in the most recent period, like-for-like sales were -10.1% lower. Workwear & Safetywear (+17.0%) and Plumbing Heating & Electrical (+4.4%) were the only two categories to sell more.

Quarter 4 total value sales weren’t helped by December’s performance. Total Builders Merchants value sales for the month were -8.4% lower than December 2022. Volume sales were -12.6% down, and prices were up +4.8%. Just four of the twelve categories sold more year-on-year, including Workwear & Safetywear (+4.8%), Decorating (+4.1%) and Ironmongery (+0.4%). The four largest categories sold less: Landscaping (-6.2%), Plumbing Heating & Electrical (-6.4%), Timber & Joinery Products (-10.4%) and Heavy Building Materials (-11.0%).

While we would expect to see a drop off in sales in December due to the holiday season, December value sales were -37.5% behind November. Month-on-month, volume sales were down -39.8% with prices only edging up +3.8%. But with six less trading days in December, like-for-like sales were -14.1% lower. All categories sold less.

Mike Rigby, CEO of MRA Research who produce this report, said: “Quarter 4 did little to turn the tide on falling sales volumes through the UK’s builders’ merchants, as 2023 closed -13.7% down on volume sales compared to 2022.

“But despite this drop in activity and the announcement of the UK economy entering a technical recession at the end of 2023, and a continuing stream of gloomy world news, consumer confidence is increasing. Falling inflation and food prices, and maybe even the prospect of political change with a general election in view have lifted spirits. According to GfK’s Consumer Confidence Index, consumer confidence climbed three points to -19 in January 2024, the best it’s been in 2 years. Better still, consumers’ personal financial index also improved to zero after 24 months of negative scores. Inflation and the prospect of falling bank rates undoubtedly contributed to this. Whether it foreshadows a more positive period for the repair, maintain, and improve markets, and an increase in spend on home improvement projects in 2024 remains to be seen.”

Set up and run by MRA Research, the BMBI – a brand of the Builders Merchants Federation – is a monthly index of builders’ merchant sales, and the most reliable, up-to-date measure of Repair, Maintenance, and Improvement (RMI) activity in the UK. The index is based on actual sales from GfK’s Builders’ Merchant Point of Sale Tracking Data, which captures value sales out to builders from generalist builders’ merchants, accounting for 92% of total sales from builders’ merchants throughout Great Britain. An in-depth review, which includes commentary by sector experts, is provided each quarter.

The Q4 2023 BMBI report is available to download at www.bmbi.co.uk.