The Q1 2023 figures from the Builders Merchants Building Index (BMBI), published in May, show a -2.3% drop in total value sales to builders and contractors year-on-year, with falling volume sales (-16.4%) countered by +16.9% price inflation. With one more trading day this year, like-for-like value sales were -3.8% lower.
Nine of the 12 categories sold more in Q1 2023 compared to the previous year with renewables and water saving (+42.3%) head and shoulders above the rest. Work wear and safety wear (+14.9%), decorating (+13.9%) and plumbing, heating and electrical (+12.8%) also performed well. Services (-4.5%), timber and joinery products (-15.3%) and landscaping (-18.3%) all sold less.
Total value sales were up +5.8% in Q1 2023 compared to Q4 2022. Volume sales edged up +0.6% and prices climbed +5.2%. With five more trading days in the most recent period, like-for-like sales were -2.5% lower than October to December 2022. Renewables and water saving (+22.3%) was the strongest category. Timber and joinery products recorded marginal growth (+2.2%).
“After a softening in demand across most timber products in the second half of 2022, hopes for a stronger start to 2023 have yet to materialise,” said Simon Woods, European sales, marketing and logistics director, West Fraser and BMBI’s expert for wood-based panels.
“New housing output fell -4.4% and, with inflation and interest rates still high, affordability is low and there’s little incentive for people to buy. Consumer confidence improved in Q1, but it remains comparatively low, and the media seem intent on keeping it that way. It’s no wonder that mortgage approvals in January 2023 fell to their lowest number since January 2009, the fifth consecutive monthly fall.
“The dip in housebuilding does little to support timber sales which are already seeing lower volumes and softening pricing. Coupled with high manufacturing costs, some mills in the UK and Europe are having enforced downtime as demand is lower than capacity.
“But there are reasons to be cheerful. The Federation of Master Builders was positive about repair, maintenance and improvement (RMI) prospects in its latest State of Trade Survey. In it, members noted an increase of +12% in RMI workloads compared to Q4 2022, and a +14% increase in enquiries quarter-on-quarter.
“A year on from Russia’s illegal invasion of Ukraine, there is still no product coming from Russia or Belarus. Losing two important players from the supply chain has left significant gaps, including some 55 million m3 roundwood equivalents a year.
“According to Timber Development UK, overall timber import volumes dropped -8.7% in January 2023 compared to January 2022. The UK is actively trying to strengthen its trading partnerships with other European countries to fill the void. Increased volumes of softwood from Sweden, Finland and Ireland helped to ease the flow of product into the UK in Q1. Long may those trading lines flourish.
“This year will almost certainly be another tough one for the timber industry. But as a material which is integral to more sustainable methods of construction, there will be sunnier days to come, I’m sure.”
