Trade body figures show building industry bounce back

Figures published by a West Midlands-based national trade body show that sales of building materials continued on a growth curve in the final quarter of 2020.

The latest results from the Builder Merchant Federation’s Builders Merchants Building Index (BMBI) confirm the sector’s continued bounce back from the April lockdown, which led to a dramatic decline in sales during Q2.

The BMBI had previously reported a strong performance in Q3 with sales returning to near normal levels.

This positive trend continued in Q4 2020, with total builders’ merchants’ sales growth of +5.4% compared with Q4 2019, helped by one more trading day this year.

The Q4 year-on-year increase was driven by strong performances in landscaping, up 22.9%, followed by timber and joinery and heavy building materials up 12.7% and 4.3% respectively

John Newcomb, CEO of the BMF, which has its headquarters in Coventry, said: “The continued year-on year growth seen in the final quarter of 2020 provides a positive indicator of the building industry’s recovery.

“No doubt the Covid effect, including its impact on product availability, will be felt for some time to come, but the adaptability to enforced changes demonstrated by merchants and their trade customers over the past 12 months gives me a cautious degree of optimism for the coming year.”

The BMF’s BMBI is seen as a gold standard in the building materials sector to measure sales activity – in an industry considered a key bellwether of the national economy and the ‘mood of the nation’ in terms of home repair, maintenance and improvement.

Using GfK’s point of sale tracking data, the BMF’s BMBI is drawn from over 80 per cent of builders’ merchants’ sales throughout the country, making it the most reliable source of data for the sector. The latest version also includes separate data from the plumbing and heating sector.

Figures from the BMF’s BMBI are used in the Department of Business, Energy and Industrial Strategy’s Monthly Construction Update,

Analysing 2020 as a whole, the latest BMBI reveals total sales value was down by -10.7% on 2019.

Emile van der Ryst, Senior Client Insight Manager – Trade at GfK added: “A final review of this year highlights just how well the sector has bounced back.

“During Q2 the economic outlook for the remainder of 2020 seemed perilous.

“However, a combination of renovation, maintenance and improvement activity, plus relaxed restrictions in Q3, followed by Brexit uncertainty and anticipated stock shortages in Q4, turned the ship.

“Taking all the above into consideration the final annual result of a -10.7% value decline seems a lot more palatable.

“2021 now provides a realistic hope of a return to normality and an expected economic upswing.”