The latest Builders Merchant Building Index (BMBI) report highlights a worrying trend for builders’ merchants, with a 7% drop in sales volumes in May 2024 compared to the previous year.
- Sales for builders’ merchants have been generally in decline over the past two years, although there was a brief recovery in April due to more trading days.
- In May 2024, despite higher sales and takings than in April, the figures were still below those of May 2023.
- Price increases have been recorded, with a 2% rise over the past year, affecting sales volumes.
- The overall outlook remains challenging as year-on-year figures continue to show a downward trend in both takings and sales volumes.
The decline in sales volumes for builders’ merchants, as reported by the latest Builders Merchant Building Index (BMBI), is a significant concern for the industry. Year-over-year data from May 2024 shows a 7% reduction in sales volumes, highlighting an ongoing trend of decreasing demand. This follows a generally declining pattern in merchants’ sales over the past two years.
Interestingly, April 2024 presented a slight deviation from this trend, with sales appearing to recover slightly when compared to the corresponding month in 2023. However, this was largely due to an increased number of trading days in April 2024 compared to April 2023, rather than a genuine improvement in market conditions.
In May 2024, although sales and takings improved compared to April 2024—with takings up by 3% and sales volumes increasing by 2.2%—the figures still fell short when measured against May 2023’s data. Prices have played a role in this scenario, rising by 0.8% on a monthly basis and by 2% over the year, which could be impacting consumers’ purchasing decisions.
Across the first five months of 2024, builders’ merchants experienced a 4.5% decrease in sales compared to the same period in 2023. The 12-month statistics, spanning June 2023 to May 2024, also reveal a 4.5% drop in total takings versus the preceding year, alongside an 8.9% slump in sales volumes. Even with six additional trading days, like-for-like takings decreased by 6.8%.
Mike Rigby, managing director of MRA Research, which produces the BMBI report, noted some positive aspects for UK construction. May 2024 saw better weather conditions, facilitating tradespeople to return to sites, which resulted in a rise in monthly construction output by 1.9%, according to the Office for National Statistics (ONS) data. However, Rigby pointed out, “Growth in new build and residential RMI has yet to feed through to merchants, where volumes continued to fall.”
The ongoing decline in sales for builders’ merchants reflects broader challenges in the construction sector, despite some isolated improvements in related areas.
