The latest data from the Builders Merchants Federation (BMF), which gathers data from retail outlets across the country, reveals a 13.9% drop in revenues in the fourth quarter of 2022 (Q4) compared to the three previous months (3rd quarter).
With prices rising 5.4% in the quarter, sales volume – goods moving from stores to construction sites – dropped 18.3%.
Part of the drop can be explained by the fact that there were five fewer trading days in the fourth quarter – comparable sales figures were down 6.6%.
Only three categories of minor products registered an increase in sales value: hydraulics, heating and electric, which grew 13.2% in value; renewables and water saving (7.1% increase) and work and safety clothing (also 7.1%).
The two biggest product categories saw double-digit declines, with heavy building materials down 13.7% and wood and joinery down 16.6%. Landscaping saw the biggest drop at 33.6%, but it’s in line with normal seasonal trends – more landscaping tends to be done in July, August and September than in October, November and December.
Comparing the last three months of 2022 with the same quarter of 2021 shows an increase of 2.9%, but only because of inflation. Prices rose 16.4% year-on-year. Volume sales were down 11.6%.
Comparison of the full year from 2022 to 2021 reveals that sales volumes are down 8.0%. But with prices rising 16.2%, shares from builder traders were 6.9% higher in 2022 than they were in 2021. With three fewer trading days in 2022, overall comparative shares were 8.2% higher.
All categories grew in value in 2022, except for wood and joinery (a 2.2% drop) and landscaping (a 0.6% drop). The fastest growing category was renewables and water management (31.5%), followed by kitchens and bathrooms (18.9%) and plumbing, heating and electrical (14.8%).
Builders Merchants Federation chief executive John Newcomb said: “With such volatility in the UK economy in 2022, it is no surprise to see the slowdown in some areas of construction reflected in dealer sales. The slowdown in demand over the last quarter, however, helped to alleviate pressures on product supply. With forecasts for 2023 predicting further slowdown in the first half of the year, general product availability should have an opportunity to recover before the market starts to recover in the second half.”
Emile van der Ryst, senior manager of customer insights at GfK, which collects the data, added: “During 2021, we widely believed that things were looking up, with several market forecasts in early 2022 indicating some form of growth – but the year turned out completely different. A quarterly review against the applicable quarter of 2021 shows the increased difficulty the industry experienced as the year progressed. The first quarter saw value growth of 17.7%, followed by 4.1%, 4.3% and 2.9% in quarters two through four. Price growth was consistently high each quarter, hovering between 15.0% and 17.7%, while volume started at +1.5% in Q1 and dropped to -11.6% in Q4. ”
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