As the pressures of inflation begin to settle in the latter half of 2023, the market is expected to return to growth, with average growth forecast at 2.1% in 2024.
The BMF said it correctly forecasted annual builders’ merchants’ sales growth in the region of 6.7% in 2022, but price inflation was the main driver here, with sales volumes falling back to pre-Covid (2019) levels.
“There are signs of the market worsening during the coming year as the Chancellor’s measures to counteract recession may further reduce consumer spending power,” the BMF said.
“Price inflation is set to continue through the first half of 2023 before gradually slowing, while sales volumes are likely to drop below 2019 levels.”
Thomas Lowe, BMF Industry analyst/economist, said the cost of living crisis is expected to last through 2023 and the pressure of inflation was still evident.
“Providing that the Spring Statement from the Chancellor does not drastically change the picture, we anticipate dipping into negative growth in 2023 before the market begins to recover in 2024.”
John Newcomb, BMF CEO, said economic volatility meant considerable uncertainty forecasting demand for core markets such as domestic repair, maintenance and improvement work and housing, where higher mortgage rates and the end of the Help to Buy scheme are expected to slow new sales.
“Other areas of construction, however, continue to see strong demand, particularly for industrial, commercial, infrastructure and government project,” he said.
