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Price drives Merchant sales growth in Q3
The BMF’s Builder Merchants Building Index (BMBI) latest report on sales of building materials in the UK reflects the undercurrent of economic uncertainty evident throughout the third quarter of the year, with almost all market growth coming from pricing. While total sales in Quarter 3 2022 were up by +4.3% on Q3 2021, sales volumes fell by -9.0%, and prices increased by +14.6%. With one less trading day during Q3 2022, like-for-like sales values increased by +5.9%.
The other major trend was the price growth of the largest category, Heavy Building Materials, up by +21.2%, with Aggregates, Cement and Plasterboard some of the main contributors. (+17.2%), and Plumbing, Heating & Electrical (+14.2%) were among the
taxes. This will undoubtedly feed into the next 12 months as the Chancellor’s measures to counteract recession further reduce consumer spending power.”
categories which grew faster than Merchant sales overall. These were led by the smaller categories of Renewables & Water Saving (+38.4%) and Workwear & Safetywear (+23.6%)
BMF CEO John Newcomb 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
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 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.
BMF responds to mandatory water labelling proposals There is no compelling case to
legislate for a mandatory water efficiency label covering the products that BMF members distribute - because the established industry-led Unified Water Label already does the job. That was the message from the Builders Merchants Federation (BMF) to ministers in a consultation that closed just before Christmas.
BMF responds to energy company obligation proposals
On Christmas Eve, the BMF responded to a consultation from the Department for Business, Energy and Industrial Strategy on enhancing the Energy Company Obligation to pay for more home insulation. Under the proposals, an extra £1 billion 3-year scheme called ECO+ will run from April 2023 until March 2026. Ministers will implement ECO+ via new regulations to obligate the larger energy suppliers.
In a digitally-enabled country like Great Britain, a simple way ought to be found to allow and encourage householders to nominate themselves to ask for assistance - either to their energy supplier or to central government itself.
Energy suppliers use agents, brokers and other third parties to locate eligible households to offer assistance - but this comes
at a cost in search fees. The BMF believes that enabling digital self-referral can encourage individuals and families to ask for help.
The BMF acknowledged that ministers want ECO+ to provide help to as many households as possible - and delivered quickly - but warned against two policy risks - namely: ¡ insulating homes in the upper Council Tax bands may lead to residents in higher- income households benefitting to the detriment of deserving lower-income households. ¡ treating rural or coastal properties can be costly (especially those homes which are off-mains gas) but such residents have a right to expect they will treated equally to urban dwellers.
In its consultation response to Energy Department, the BMF
January 2023
www.buildersmerchantsjournal.net
said that the cost-of-living crisis, exacerbated by high energy bills, must mean public funds are properly targeted within ECO+ in a determined drive to improve under-insulated properties.
The primary aim is to rapidly fit energy-efficient improvements in more homes in two criteria: ¡ first priority group will be those on the lowest incomes in vulnerable households. ¡ second general group will encompass all homes in Council Tax bands A-D (England), bands A-E (Scotland) and bands A-C (Wales) with an EPC rating of D or below.
The BMF argues for a nationwide retrofitting programme - especially in districts with a high number of homes rated as EPC Band C or worse.
In its formal response to the Department for Environment, Food and Rural Affairs, the BMF questioned why DEFRA believes it is necessary to make new regulations for mandatory labelling when the Unified Water Label already exists - and is a workable and more cost-effective scheme than the proposals. The BMF also questioned why it is felt necessary to spend £££ millions of taxpayers’ funds to invent a new scheme, from scratch, to replicate or take-over the established industry-wide Unified Water Label. Ministers ought to instead embrace the UWL as a way to comply with any new mandatory labelling - rather than legislating for new, unnecessary arrangements. In addition, DEFRA was cautioned against using the term “efficiency” because the BMF and others firmly believe it is both unwise and misleading. The consultation wrongly implies water efficiency when (in fact) it only indicates water use. Buyers will be misled as their choices take no account of low or high water pressure that has a bearing on actual use at home. There must be a consistent approach throughout all 4 home nations - with only one organisation given UK-wide responsibility for policing any such labelling scheme - the BMF said.
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