Latest News Wed, May 25, 2022 6:07 AM
Total value sales data from Britain’s Builders’ Merchants shows Q1 2022 was a bumper quarter thanks in part to a record-breaking March, which clocked up the highest ever total sales in the history of the BMBI.
However, this was driven once again more by price inflation (+16.0%) than volume growth (+1.5%).
Quarter 1 2022 total value sales were 17.7% higher than Q1 2021, with no difference in trading days. All bar one categories sold more.
“Although construction output continued to rise in the first quarter of 2022, there is growing uncertainty in the supply chain, which further increased following Russia’s invasion of Ukraine,” said John Newcombe, CEO of the BMF.
“The conflict will further exacerbate the impact of rising energy costs as well as constraining availability of certain products and raw materials.
“The Federation of Master Builders’ Q1 State of Trade Survey found materials pricing and availability were the key concerns for SME builders, who form a core element of the builders’ merchant customer base. During the first quarter of the year, 73% of FMB members had delayed jobs due to a lack of materials, with 98% reporting increases in materials costs, and 95% expecting further price increases during the year. In response, 83% have put up their own prices for work.
“While current workload and forward enquiry levels appear to be stable in the SME market for now, the domestic repair & maintenance market is potentially the most exposed to price inflation, and with increased pressure on household costs likely affecting consumer confidence, we may see more projects put on hold later in the year.
“Looking at the broader market, initial ONS figures estimate that construction output rose by +3.8% in Q1. Outside of the coronavirus pandemic period, this is the strongest quarter on quarter growth since Q1 2019 (when output rose by +3.9%). Both new work and repair & maintenance recorded increases, with new private housing (+5.2%) and domestic repair & maintenance (+4.5%) amongst the highest contributors.
“There are, however, signs of the market cooling as the ONS reports total construction new orders fell by -2.6% in Q1 2022 against Q4 2021. Building out projects currently on site should see strong demand continuing through the summer months, but continuing pressure on availability coupled with rising costs for raw materials, energy and labour suggests that price inflation will be the main story of 2022.
“The BMF has adjusted its Spring Forecast in the light of these factors. Having initially anticipated that material price inflation would ease throughout the coming year, we are now forecasting merchant sales growth of 6.1%, with the majority of that due to price inflation.”
Renewables & Water Saving (+29.3%) did best, followed by Kitchens & Bathrooms (+26.3%) which also recorded its best-ever quarterly sales. Timber & Joinery Products (+21.4%) and Heavy Building Materials (+17.4% in value) grew more slowly while its volume is up by 5.0%. Plumbing, Heating & Electrical (+16.4%) and Miscellaneous (+12.8%) both had their best-ever quarterly sales. Workwear & Safetywear (-0.1%) was flat.
Comparing Q1 2022 with Q1 2019, a pre-pandemic year, total value sales were 24.7% higher, with no difference in trading days. All categories sold more including Landscaping (+51.4%) and Timber & Joinery Products (+40.6%), which did particularly well. Heavy Building Materials (+18.9%), Kitchens & Bathrooms (+17.8%) and Plumbing, Heating & Electrical (+11.2%) all grew more slowly.
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