BMBI: Tentative start to 2024 as January value sales slip

The latest Builders Merchant Building Index (BMBI) report shows builders’ merchants’ value sales were down -2.1% in January compared to the same month in 2023, with volume sales falling -3.2% and prices creeping up +1.1%. With one more trading day this year, like-for-like sales were down -6.5%

Year-on-Year

Compared to January 2023, nine of the twelve categories sold more in January this year with Workwear & Safetywear (+18.3%), Landscaping (+6.2%) and Decorating (+6.1%) the better performers. However, falling sales in two of the largest categories impacted overall sales: Heavy Building Materials (-3.8%) and Timber & Joinery Products (-6.3%)

Month-on-Month

Compared to a poor December 2023, total merchant sales in January were +41.2% higher month-on-month. Volume sales were up +44.2% while prices were down -2.1%. With six additional trading days in January, like-for-like sales increased +2.7%. All categories sold more including the largest three categories: Landscaping (+52.2%), Timber & Joinery Products (+43.8%), and Heavy Building Materials (+42.5%). Services (+19.2%) grew the least.

Rolling 12 months

Total merchant sales in the 12 months from February 2023 to January 2024 were -5.2% down on the same period the year before (February 2022 to January 2023). Volume sales were -12.9% lower and prices were up +8.8%. With two more trading days in the most recent 12-month period, like-for-like sales were -6.0% lower.

Eight of the twelve categories sold more, with Renewables & Water Saving (+20.6%) and Decorating (+8.1%) the standout categories. Again, the three largest categories – Heavy Building Materials (-3.7%), Landscaping (-11.0%) and Timber & Joinery Products (-13.9%) – sold less.

Rob McGlennon, Managing Director of Deceuninck UK & Ireland and BMBI’s Expert for Windows & Doors, says: “Regardless of your political leaning, the Government is likely to change in the next 12 months, bringing fresh eyes and enthusiasm. A new Government must be seen to address the big problems, including housing.

“Young voters are feeling disenfranchised. Home ownership is out of reach for many young voters who are forced to live with parents or friends or in shared accommodation at high rents. Many are Labour voters who expect a new Government to put housing at the top of its to do list.

‘Reduction in weather-vane politics’

“Forecasters say England needs 500,000 new homes a year to keep up with the country’s rising population, far more than either main party has pledged to deliver, and far more than the industry’s capacity to build. The industry is looking to Government for a reduction in weather-vane politics to give them the confidence to invest in additional capacity.

“A population boom from record levels of migration, rising domestic demand and a historic undersupply has raised latent demand. Over 20 years, governments have failed to build the target of 300,000 new homes a year, and the backlog is growing.

“As well as new housing, the prospects for RMI also look strong for 2024, driven largely by the need to upgrade the energy performance of Britain’s housing stock.

“Despite news that the UK economy entered recession at the end of 2023, technically or for real, consumer confidence is increasing. Falling inflation and food prices have lifted spirits, and the smell of change is in the air.

“GfK’s Consumer Confidence Index showed consumers’ personal financial index, their willingness to spend, improved to zero after 24 months of negative scores. According to Savills, the over 65s held a record £2.2 trillion in mortgage free housing wealth last year. There are good times coming.”

BMBI Experts speak exclusively for their markets, explaining trends, issues and opportunities. For the latest reports, Expert comments and Round Table videos, visit www.bmbi.co.uk.

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