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ECONOMIC SNAPSHOT


THE DIY MARKET STANDS STRONG


The latest facts and figures from the British Home Enhancement Trades Association (BHETA) and what they mean for suppliers to the home improvement industry.


B HETA chief


operating officer, Will Jones, says: “While ONS statistics are


a useful indicator of


the economy’s health or otherwise in this prolonged period of Brexit uncertainty, EPOS data from our own marketplace is an invaluable way of checking on the real world! On the one hand, the fact that it too indicates there are many positives to take on board, these signs of underlying improvement and opportunity must be tempered by the general atmosphere which facing the unknown inevitably creates. I can qualify the latter by noting that according to the BHETA Gfk Quarterly POS Index consumer confidence has dropped once again and is now at –13 versus –9 from this time last year.


“Having said that the real time EPOS information tells us that all categories in home improvement/ home enhancement bar three have achieved value growth; the only declines have been within tabletop, air


treatment and the garden


categories – and two of these are clearly related to the very mixed summer weather.


“The total index has increased by £73M, a drop on the previous quarter’s annual growth of £96M, but given the confidence figures, this is not as bad as it might be. The category which has managed the biggest growth in value terms is small electrical (+1.3%). This has been bolstered by the performance of hot beverage makers (+2.9%) and vacuum cleaners (+4%). This is very encouraging for these categories which are generally a considered purchase. “There are a couple of sectors which have been struggling due to the contrast between this summer


8 DIY WEEK 23 AUGUST 2019 and last summer. Air treatment


is down 10% and every subsector of this has been impacted; the biggest element being cooling fans which have


contracted by 20%.


The garden category is the other biggest decliner, witnessing a circa 5% drop; this being driven by the subcategories of sheds (-6%) and greenhouses (-4%). “In the DIY sector specifically,


there is a more positive picture. The market here has increased by £121M during the last 12 months compared to the January – December 2018 period.


Big winners have been


hardware (+4.9%) along with safety and security (+6.1%). The success of the safety and security sector is predominately down to smoke alarms (+6%) and security lights (+16%). In contrast intruder alarms have suffered a -13% decline. “In conclusion, this latest view of the home, DIY and garden markets based on EPOS data still shows that despite varying weather conditions and uncertainty, both completely out of our hands, there are significant upsides and we all need to focus on maximising these trends.”


Consumer price index


The consumer Prices Index 12-month rate was 2.0% in June 2019, unchanged from May 2019. The largest downward contributions to change in the 12-month rate between May and June 2019 came from motor fuels, accommodation services and electricity, gas and other fuels.


Retail sales In the three months to June 2019, the quantity bought increased by 0.7%, with growth across all sectors except food stores and department stores; however, this was a slowdown from the stronger growth of 1.6%


in the three months to May 2019. The quantity bought in June 2019 increased by 1.0% when compared by May 2019.


Mortgage Approvals According to the Bank of England mortgage approvals for house purchase (an indicator of future lending) fell back slightly on the month to 65,400, though remained broadly in line with the narrow range seen in previous years. The number of approvals for remortgaging also fell in May 2019, to 46,700.


House Price Index Average house prices in the UK increased by 1.2% in the year to May 2019, down by 1.5% in April 2019. Over the past three years, there has been a general slowdown in UK house price growth, driven mainly by a slowdown in the south and east of England. The lowest annual growth was in London, where prices fell by 4.4% over the year to May 2019.


Labour Market


The UK employment rate estimated at 76.0%, higher than a years earlier (75.6%); on the quarter, the rate was 0.1% points lower, the first quarterly


decrease since June to August 2018. The UK unemployment rate was estimated at 3.8%; it has not been lower since October to December 1974.


Construction Output Construction output growth was flat in the three-month on three-month all work series in May 2019; this was because of a fall in repair and maintenance of 0.5% being offset by a 0.3% increase in new work.


Commodity prices Energy prices plunged 10.7% in June. Combined with a 2.8% drop in May, the sell-off has almost wiped out four consecutive months of gains earlier in the year. Non- energy commodities rose 1.8%. Grains continued to surge, jumping 7.5%. Precious metals rose 5.2%.


Foreign exchange analysis – Reuters


Sterling was little moved on Tuesday 23 July after Boris Johnson won the contest to be Britain’s new prime minister, as investors worried whether he would lead Britain towards a no deal Brexit. 1 GBP = 1.12 EUR 1 GBP = 1.24 USD


www.diyweek.net


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