BHETA ECONOMIC SNAPSHOT
WORKING HARDER TO WIN
The latest facts and figures from the British Home Enhancement Trades Association (BHETA) and what they mean for suppliers to the home improvement industry.
T
he latest figures tell us that consumer spending is wavering, as doubts about the future set in and an increase in caution is the
result,” says home improvement sector director Paul Grinsell. “Recent reports from multiples like B&Q and Bunnings illustrate the challenges and there are a phenomenal number of price-led promotions across the market, as retailers of non-essentials battle for consumers’ disposable cash. “Feedback from a number of
BHETA members on year-to-date performance reveals that, for many, even the worst financial performance is simply on a par with this time last year. In fact, many companies are ahead on sales compared with 2016. So, growth is still more than possible despite the challenges. Companies achieving success are having to work harder for it than ever before, however. They are: Chasing online sales and online retailers just as hard as any other kind of retail and no longer as an optional extra channel
Attending – not necessarily exhibiting at – every exhibition and trade show to look for new product ideas, to keep abreast of trends and to look for new suppliers
Diversifying into every allied market, where cost of entry is manageable and can still yield return on investment
Expanding export or investigating it for the first time
Maintaining commitment to product innovation and marketing to create profile and differentiation.”
10 DIY WEEK 13 OCTOBER 2017
In many ways, it’s the old story of having the courage and conviction to invest even more effort and time when the market is challenging. It’s clear that positive action still pays dividends.
Consumer Price Index – July 2017 The Consumer Price Index including owner occupiers’ housing costs 12-month inflation rate was 2.6% in July 2017, unchanged from June 2017.
The price of motor fuel continued to fall and provided the largest downward contribution to change in the rate between June 2017 and July 2017. This was offset by smaller upward contributions from a range of goods and services, including clothing, household goods, gas and electricity, and food and non- alcoholic beverages.
Retail Sales – July 2017 In July 2017, the volume in retail sales increased by 0.3% compared with the previous month, due to strong sales in food stores at 1.5%; recovering from a fall of 1.1% in June 2017. All other sectors, except food and household goods stores, declined on the month for the quantity bought in retail sales. Online sales increased year on year by 15.1% and by 0.3% on the month, accounting for approximately 16.0% of all retail spending.
Mortgage Approvals – June 2017 The housing market has reached a plateau, as activity and lending have been flat since the start of the year. It is possible that we see a slowdown in activity if economic conditions become more
challenging. This is illustrated by property transactions averaging just over 100,000 a month for the past few months, though the recent weakening in house purchase approvals could mean fewer transactions in the months ahead. Banks approved 40,200 mortgages for house purchase in June, down from 40,287 in May but barely changed from June 2016. Looking at transactions with a mortgage, first-time buyer activity is the only part of the market that has shown consistent growth recently.
Home mover numbers have been slowly falling, on a 12-month rolling basis
House Price Index – June 2017 Average house prices in the UK have increased by 4.9% in the year to June 2017 (down from 5.0% in the year to May 2017). The annual growth rate has slowed since mid- 2016 but has remained broadly around 5% during 2017.
The average UK house price was £223,000 in June 2017. This is £10,000 higher than in June 2016 and £2,000 higher than last month.
UK Labour Market: April-June 2017 Estimates from the Labour Force Survey show that, between January to March 2017 and April to June 2017, the number of people in work increased, the number of unemployed people fell, and the number of people aged from 16-64 not working and not seeking or available to work (economically inactive) also fell. There were 32.07million people in work, 125,000 more than for
January to March 2017 and 338,000 more than for a year earlier.
Construction Output – June 2017 Construction output fell three month on three month by 1.3%, after growth of 1.1% in the first three months of 2017. This contraction in output has been driven by falls in both all new work, and repair and maintenance, which fell 1.3% and 1.4% respectively.
Month-on-month construction output also fell in June 2017, down 0.1%, and contracting for the third consecutive month. The decline was driven by a 1.1% fall in all repair and maintenance; however, this was offset by a 5.1% increase in private housing, which reached its highest level on record.
Commodity Prices – July 2017 Energy commodity prices price 3% in July, while non-energy prices rose 2%. Food and beverages prices rose 0.7%, respectively. Metals and minerals prices surged 5.1%, while precious metals dipped 2.3%.
Foreign Exchange Analysis: Reuters – 21st August 2017 Sterling edged back on Monday, August 21 towards an almost six-week low against the dollar, as growing doubts around the progress of Brexit talks with Europe continued to weigh on the currency. Doubts over the government’s handling of the Brexit talks and a collapse this month in expectations for a rise in Bank of England interest rates over the next year have pushed the pound back below $1.30 and 90 pence per euro. 1 GBP = 1.09 EUR 1 GBP = 1.29 USD
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