Price inflation has been the driving force of growth in the building materials sector in 2022 according to data analysed by industry experts.
The Builders Merchant Building Index (BMBI) for Q3 2022, from national trade body the Builders Merchants Federation (BMF), examines the trend which has seen growth created by rising prices rather than an increase in sales.
The total value of sales for July to September 2022 were 4.3% higher than the same period last year, but while prices increased by 14.6% the volume of sales dropped by 9%.
John Newcomb, BMF CEO, said: “We have seen a pattern emerge throughout the year with sales value increases largely driven by price inflation rather than volume growth.
“Following the Autumn Statement commercial and retail customers alike will increasingly feel the combined squeeze of rising prices, interest rates and taxes.
“This will undoubtedly feed into the next 12 months as the Chancellor’s measures to counteract recession further reduce consumer spending power.”
The BMBI includes a breakdown of sales figures by region and in Q3 of 2022, two of the eleven regions – the North East and West Midlands – recorded their best-ever quarterly sales.
Issued every quarter, the BMBI is seen as a gold standard measure of sales activity in the building materials sector – an industry considered a key bellwether of the national economy and the ‘mood of the nation’ in terms of home repair, maintenance and improvement.
Using GfK’s point of sale tracking data, the BMF’s BMBI is drawn from over 80 per cent of builders’ merchants sales throughout the country, making it the most reliable source of data for the sector.
Emile van der Ryst, Senior Client Insight Manager – Trade at GfK added: “This consistent theme of price increases and volume declines mirrors much of what is seen across the UK economy and like other sectors there’s probably an expectation that volumes will continue decreasing.
“In September, GfK’s Consumer Confidence set a record low since tracking started in 1974, a clear reflection of the difficulties currently experienced.
“The final quarter of the year will be increasingly difficult, as highlighted by the Bank of England expecting a two-year recession.”
Figures from the BMF’s BMBI are used in the Department of Business, Energy and Industrial Strategy’s Monthly Construction Update.
