Economic Headwinds Persist for Builders Merchants: A Look into 2024 and Beyond

As we continue to navigate the choppy waters of economic uncertainty, the latest Building Materials Forecast Report from the Builders Merchants Federation (BMF) offers crucial insights. Despite the hope for a brighter future, the forecast paints a sobering picture for the immediate road ahead.

The Current State of Affairs

The first quarter of 2024 projects a 2.2% dip in sales revenue compared to the same period in 2023. This initial setback, however, is expected to give way to a modest year-end growth of 0.4%. Nevertheless, these numbers hardly signal a robust recovery. They follow a 3.5% sales decline in 2023 and suggest that it could take several years for the market to rebound to its 2022 levels.

The Underlying Factors

John Newcomb, the BMF chief executive, attributes this trend to a combination of fourteen interest rate hikes and a lingering cost-of-living crisis. These factors have not only dented consumer confidence but have also significantly impacted the new house-building market. The effects have been stark, with both volume and value sales through builders’ merchants experiencing a notable decline throughout 2023. Newcomb notes the correlation between these trends and broader economic challenges, particularly evident in the housing market where new housebuilding registrations have nosedived.

A Silver Lining in the Clouds

Despite the general downturn, there are sectors within the market showing resilience. Thomas Lowe, BMF economist, points out that while larger scale repair, maintenance, and improvement (RMI) projects are being deferred, lightside RMI projects have maintained year-on-year value growth. This resilience amidst adversity is a promising sign for the builders' merchants sector.

The Road to Recovery

Looking ahead, the BMF anticipates a gradual recovery. Although the market conditions are expected to remain volatile, there are indications that the long-term economic health of the merchanting sector is on an upward trajectory. A key factor in this positive outlook is the anticipated settling of net inflation of building materials, which may outpace the overall economic recovery. This could pave the way for a swifter rebound as household disposable income pressures begin to ease.

Our Role in Supporting the Industry

At Find A Start, we recognize the challenges faced by the construction and merchanting sectors. We are committed to providing a platform that connects skilled tradespeople with contractors, ensuring that projects, whether large or small, have access to the necessary workforce. Our user-friendly platform is designed to streamline the process for contractors and tradespeople alike, making it easier to navigate these uncertain times. As we look forward to a recovery in the sector, Find A Start stands ready to play a vital role in the resurgence of the UK construction industry.

For more information on how we can assist in your next project, visit www.findastart.co.uk