A new report, Predictions for Builders’ Merchants in 2023, by ECI Software Solutions, a software specialist, ran a poll to find out what industry experts predict the challenges are for the rest of the year.

Financial instability, rising materials costs and the cost of borrowing are some of the top concerns within the building materials distributors sector, according to a new poll of builders’ merchants. 

People in the sector will need to turn to merchant-specific software to grapple with the lasting impact of the COVID-19 pandemic on the supply chain, as well as the ongoing war in Ukraine if they are to get ahead of the curve.

The findings have been published in a new report, Predictions for Builders’ Merchants in 2023, by ECI Software Solutions, a software specialist for building trade suppliers. ECI polled those in the industry on their top challenges and opportunities for the year ahead. 

This comes as new data revealed that the construction sector represented 18% of all company insolvencies in 2022 – the largest percentage out of all sectors tracked. 

Ed Powell, Director of Steel Landscaping Co, said that price rises could cause bottlenecks in construction projects.

“Price rises across the board will increase the cost of materials, machinery, equipment and hiring costs," he said. "These increases will likely lead to delays with many projects and impact profit margins. 

“Basic construction supplies are becoming increasingly expensive, and more challenging to secure, which is why we’ll be monitoring our supply chain processes to ensure we can stay ahead of the curve.”

One recent survey found that the priorities of builders’ merchants and suppliers in the sector are at a “service level disconnect”. 

Craig Sanders, Joint Managing Director at Protrade, explained how rising business costs could pose a threat to the industry which “could lead to businesses going into administration if they are unable to pass on costs” which could cause “a reluctance to invest or proceed with construction projects”.

“Despite an easing in the supply constraints of many construction-related projects, a handful of key items are still in short supply and high demand," he said. "This often means that projects can get off the ground, but come to a grinding halt, part way through the build.”

Andy Scothern, Director of Business Development  - eCommerce at ECI Software Solutions, said: “With fears of an economic downturn, it’s no surprise that there’s feelings of unease across the industry. Rising inflation and fears of recession means builders’ merchants are faced with trying to tighten their belts to reduce business costs while retaining the workforce and holding onto ‘just enough’ stock.

“Rather than grasping at straws to find ways to trim costs, it’s important to consider how builders’ merchants can take advantage of software solutions to better manage their product inventory and work seamlessly with suppliers - not at a disconnect.” 

Click here to view the full report: https://www.ecisolutions.com/en-gb/blog/survey-builders-merchants-share-challenges-for-year-ahead/