Price inflation outstrips volume growth for builders merchant – UW GROUP

Price inflation outstrips volume growth for builders merchant

There was just a 1.5% increase in the volume of goods leaving Britian’s builders merchants in the first quarter of 2022, compared to 2021, but a 17.7% rise in the value of sales.

The latest report from the Builders Merchant Federation (BMF) Builder Merchants Building Index (BMBI) illustrates the impact of price inflation, driven by rising energy, fuel and raw material costs.

Sales of Heavy Building Materials, the largest product category increased 17.4% by value (money through the tills), but 5.0% by volume (amount sold) in the first quarter year-on-year. This category includes many energy-intensive products, and bricks, blocks, cement, plasterboard and roofing products all saw their highest quarterly prices to date.

Timber & Joinery products have been even more affected by fluctuating prices over the past 12 months.  Year-on-year results show the value of sales up by 21.4%, with volume down by 11.3% – a price increase of 36.9% since the first quarter of 2021.   However, Timber & Joinery prices decreased by 6.7% in Q1 2022 against Q4 2021, which may indicate that prices in this category have already peaked.

Landscaping, one of the strongest performers throughout the pandemic, saw a value increase of 14.4% against Q1 2021, with volumes down by 3.5%.

BMF chief executive John Newcomb said: “Taken at first sight there are some astonishing value growth figures in this quarter’s BMBI, but this must be tempered by the disparity between price and volume growth.  The supply chain was already facing uncertainty before the outbreak of war in Ukraine.  The conflict can only exacerbate this. Continuing pressure on availability coupled with rising costs for raw materials, energy and labour suggests that price inflation will be the main story of 2022.”


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