Q3 figures show short-term improvement for building materials' sales

Published:  28 November, 2012

UK: The latest Monthly Sales Indicators from the Builders' Merchants Federation show that sales of building materials rose nationally when adjusted for both inflation and trading day differences. 

Materials sales rose by 1.9% in Q3 July to September 2012, compared with the same period last year; and by 8.9% when compared with the preceding quarter (April to June 2012).

The BMF's 12-month research indicates that there is little to cheer just yet. The national figure shows a fall of 1.6% in builders' merchant sales for the 12 months to September 2012 over the previous 12-month period, with marginal improvements in only four regions.

Unusually, Q3 sales in Greater London were the weakest in the country, with builders' merchants reporting a quarterly year-on-year reduction of -5.1%. Conversely, Wales had the strongest results, reporting a quarterly year-on-year increase of 13.8%

Commenting on the figures, BMF secretary, Peter Matthews, said: "It is clear that construction is lagging behind other industries in coming out of recession, largely due to the financial constraints limiting building activity and the housing market.

"Construction has a high proportion of small businesses who are suffering the consequences of the credit squeeze on two fronts. Mortgage lending is running at about 30% of average levels and it is this which impacts on housebuilding and the home improvement market. Lenders are treating smaller building companies like social pariahs and refusing them lines of credit.

"If the situation is to improve in the foreseeable future, we need more than just the Bank of England's lacklustre Funding For Lending Scheme to start lending again."

The BMF's Sales Indicators are complied every month from sales turnover information from the majority of merchant member outlets.

The figures are adjusted for both price inflation and trading day differences and show the percentage change in the value of sales between given dates taking into account price changes computed from merchant members' own building materials price inflation data.

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