NEWSROUND Housing slow-up pulls down construction forecasts


Construction output will fall from a record-high level and contract by 6.4% in 2023 according to the CPA’s Spring Forecasts. This is a downgrade from a fall of 4.7% expected in the Winter, driven primarily by sharp falls in the two largest construction sectors – private new housing and private housing repair, maintenance and improvement (rm&i) – as well as government announcements of delays to major infrastructure projects, such as delaying HS2 work at Euston station and work on major road schemes.


Growth continues at Burrell


In infrastructure, the third- largest sector, growth has been downgraded from the Winter Forecasts owing to government A wider recovery in economic growth in 2024 is expected to boost demand for both new build housing and rm&i activity and total construction output is forecast to return to growth, rising by 1.1%. Private housing output is forecast to fall 17.0% in 2023, partly a consequence of last year’s interest rates rising to a 14-year high, broader cost of living increases and falling real


incomes. Private housing rm&i is similarly exposed to the fall in real incomes but is also experiencing slower demand. This is due to the fading impact of the one- off boost to activity during and immediately after the pandemic, when increased working from home, a ‘race for space’, and accumulated savings and housing wealth saw households investing in large improvements projects. A drop in planning applications in the second half of 2022 and the return of competing spending decisions such as overseas holidays


Weak housing and RMI impacts Travis Perkins’ first quarter


Travis Perkins plc managed a resilient first quarter trading performance, despite challenging market conditions. Total sales were down 2.8%.


North East and Yorkshire independent builders’ merchant James Burrell has reported a show a 24% increase in turnover to £113.5m, for the year to October 2022, plus a pre-tax profit up by 14.8% to £3.5m and a strong working capital base.


Managing director, Mark Richardson, said: “The directors are satisfied by the performance for the year. The first half of 2022 carried on with the construction sector continuing to experience heightened demand for building materials. Economic and political developments resulted in a more challenging trading environment for the second half of the year. These variable conditions are widely anticipated to continue throughout 2023.”


The company now plans a six-figure renovation of its York branch.


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Weak new build housing and domestic repair, maintenance and improvement markets especially impacted the Merchanting sector, although the commercial, industrial and public sector markets, accounting for just under half of the Group’s end market exposure, saw more resilient demand.


Price inflation was lower than towards the end of 2022, but was


point to a reduced pipeline of improvements work and discretionary r&m projects for this year. As a result, output is forecast to fall 9.0% in 2023, which is partly offset by strong activity on energy efficiency retrofit and solar/PV work, before a broader economic recovery that drives output growth of 2.0% in 2024. In infrastructure, forecast growth rates have been downgraded in the Spring Forecasts to 0.7% for 2023 and 1.2% for 2024, from 2.4% and 2.5% respectively in Winter.


sales growth of 4.6%. In the UK, the appeal of the omni-channel model to customers continues to drive digital adoption with App downloads now passing one million and almost a third of customers now preferring to use the App to purchase from Toolstation.


still around 9.0%, as suppliers passed-on increases on key product lines in 2023. Overall, Merchanting total sales were down by 4.7% in the quarter. Toolstation saw total sales growth of 8.6% and like-for-like


CEO Nick Roberts, said: “As we had anticipated, trading conditions were challenging in the first quarter but our diverse exposure across the construction sector has enabled us to deliver a resilient performance. The timely actions taken to prepare our businesses for a lower demand environment mean that we continue to expect to deliver a full year performance in line with market expectations”


Two new specialist independent merchants join NBG


Two specialist merchants have set their sights on accelerated growth after joining National Buying Group (NBG).


Northamptonshire-based LMR Building Supplies was founded in 2018, and provides customers in the Northamptonshire area with quality building materials including timber, landscaping products, and civils and drainage supplies.


Woodstock Plumbing & Heating, meanwhile, has been supplying retail and trade


customers with bathrooms, heating systems and plumbing fittings since 1987. Located in Andover, the merchant boasts a specialist showroom with the capacity to tailor bespoke bathrooms to a variety of styles, tastes, and budgets. The business is also looking to develop its renewables offering as demand for sustainable heating and plumbing technologies continues to grow.


Phil Bonar, partner development & recruitment


manager at NBG, said: “It is with absolute pleasure we welcome LMR and Woodstock Plumbing & Heating to the NBG community of like-minded merchants.”


www.buildersmerchantsjournal.net May 2023


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