The Builders Merchants Federation’s (BMF) latest Builders Merchants Industry Forecast Report has presented a lacklustre picture if no deal is concluded, with the turbulence in this year and possibly the next making sales’ difficult to forecast.
The report analysis the key factors affecting builders’ merchants’ activity to project future sales from October 2020 until the end of 2021. Against the turbulent combination of COVID-19 and Brexit, both the final quarter of this year and the coming year prove difficult to forecast.
The sector remains resilient, but overall confidence is subdued with government restrictions still in place, resulting in the forecast for an 11.1% decline in average year-on-year growth for 2020.
The outcome of the Brexit trade talks dominates the forecast for 2021, with the Report analysing two scenarios, the first based on Brexit with a deal, and the second on Brexit without a deal.
Under the first scenario, Q1 2021 performance shows strong growth (+8%) if a trade deal is agreed, alongside the implementation of the COVID vaccination programme helping to boost confidence. However, Q1 2021 growth is limited to +3.3% under the no deal scenario.
The forecast shows the outcome of the trade deal affecting sales during the whole of 2021. Against the backdrop of a poor performing 2020, the forecast with a trade deal shows encouraging growth of 16.8%, but a more pessimistic increase of 12.5% if no deal can be concluded.
