Sales figures for Q1 2024, released in the latest BMF Builders Merchants Building Index (BMBI), have highlighted the continuing challenges in the construction sector, with adverse weather conditions in February and March also playing a role in dampening building material sales.
Taking a more positive view, however, prices have largely stabilised.
Q1 2024 v Q1 2023
Year on year total sales values in Q1 2024 fell by -7.2% compared to Q1 2023. Volume sales were down -8.7%, whereas prices rose by +1.6%. With one less trading day in Q1 2024, like-for-like sales were -5.7% lower this year.
The two largest categories were both well down on Q1 2023, with Timber & Joinery Products down by -10.6% and Heavy Building Materials down by -9.4%.
Q1 2024 v Q4 2023
Total sales in Q1 2024 were +3.5% higher than in the previous three months. Volume sales increased by +3.9% while prices were flat at -0.4%.
However, with three more trading days in Q1 2024, like for like total sales were -1.4% lower than Q4 2023.
Latest 12 months v previous 12 months
Looking back across the last 12 months, total merchants’ sales between April 2023 and March 2024, were -5.9% lower than in the same period a year earlier, with no difference in trading days. Volume sales fell by -11.8% while prices rose by +6.6%.
Although eight of the smaller categories sold more in the last 12 month period, the three largest categories all sold less – Heavy Building Materials at -5.7%, Timber & Joinery Products at -13.2% and Landscaping at -8.4%.
Comments
Emile van der Ryst, senior client insight manager at Trade at GfK, said: “Although the start to 2024 has been challenging, as could be expected, slowly but surely inflation has started coming down, while the UK moved out of a recession again. A headline story of the first quarter is the noticeable decline in price growth, which now sits at only +1.6% compared to +7.1% for 2023 Q4 vs 2022 Q4, and +16% for 2023 Q1 vs 2022 Q1.
“This is something we predicted at the end of 2024, when we also foresaw volumes recovering in the second half of the year. The construction sector has been hampered by a lack of focused government input for the sector. We must hope that the earlier than expected election will sharpen that focus in the second half of the year.”
John Newcomb, CEO of the BMF, said: “The first quarter’s results reflect the lowest number of housing starts in over a decade, a lack of consumer confidence and what feels like several months of continuous rain. The announcement of a General Election on 4 July brings fresh hope of better times around the corner.
“The combination of a new government, a continued fall in the rate of inflation and a reduction in interest rates should greenlight public projects, boost confidence in the housing market and encourage commercial and industrial projects to proceed.”
