The latest Builders Merchant Building Index report reveals a surge in April 2024 sales compared to the previous year, primarily due to an increase in trading days.
- Builders’ merchants experienced a 3.9% uptick in year-on-year sales for April 2024, despite daily takings dropping 11%.
- Sales volumes saw a rise of 4.7% year-on-year, whereas pricing strategies led to a 0.8% decrease in prices.
- Certain categories, such as workwear and safetywear, displayed remarkable growth, with a near 30% increase in sales.
- Overall merchant sales from May 2023 to April 2024 fell by 4.7% compared to the preceding year, indicating broader market constraints.
In April 2024, builders’ merchants reported a notable 3.9% increase in sales compared to April 2023, largely attributed to the existence of additional trading days. However, when examining the figures on a like-for-like basis, considering sales per day, there was an 11% decline, highlighting challenges masked by the calendar anomaly.
Sales volumes increased by 4.7% year-on-year, yet this volume growth was accompanied by a 0.8% decrease in average prices, reflecting strategic pricing adjustments by merchants. Meanwhile, specific categories such as workwear and safetywear demonstrated substantial expansion, achieving nearly a 30% rise in sales, followed closely by the decorating category at 14% and plumbing/heating & electrical at 13%.
Conversely, the three largest categories, namely heavy building materials, timber & joinery products, and landscaping, exhibited modest growth rates of 1.4%, 1.4%, and 3.2% respectively. These figures indicate a disparity in consumer demand across different product lines. Month-on-month, April’s takings improved by 5% from March, with sales volumes seeing a 7.4% boost, although these again were countered by a significant 2.3% drop in prices.
Looking over a longer horizon, the total sales revenue of merchants in the twelve months from May 2023 to April 2024 declined by 4.7% compared to the same period a year earlier. This decline was paralleled by a substantial 9.6% fall in sales volumes, despite a 5.4% increase in prices. It appears that the four additional trading days over this one-year period accounted for a like-for-like drop of 6.3% in merchant takings.
Mike Rigby, the managing director of MRA Research, producer of the BMBI report, noted external factors contributing to these figures. “Heavy rainfall and strong winds again disrupted construction output,” he mentioned, indicating that most sectors saw contraction in April, with private new housing and private repair and maintenance sectors suffering significant declines of 4.4% and 2.5% year-on-year, respectively. Rigby highlighted the persistence of adverse economic conditions affecting the sector, with interest rates remaining steady at 5.25% and the inflation rate decreasing to 2.3%, yet still exerting upward pressure on some prices and household budgets.
The BMBI report underscores the complex dynamics in the builders’ merchant sector, where increased trading days masked broader challenges and disparities in category performance.
