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Positive signs for 2017

With the Builders Merchants Federation (BMF) recently releasing a report on the final quarter of builders’ merchant sales for 2016, we at Midland Lead thought we would offer our thoughts on last year’s industry results and what to expect for roofing in 2017.

There’s no doubt that last year came with its fair share of difficult factors for us all to negotiate. In spite of this, the BMF’s Builders Merchant Building Index (BMBI) – which uses GfK Point of Sale data covering over 80% of merchants’ sales to builders and tradespeople –   has reported that the market ended 2016 on a positive note, with the final quarter showing a strong set of sales results.

General overall sales of building products in the final quarter of 2016 increased by 5.5% on the same quarter in 2015, with roofing products a mainstay of these sales. This was undoubtedly buoyed by a mild, dry autumn allowing sustained building to continue to the year end.

Lead products sit within the Heavy Building Materials category of the BMBI report, which was one of the best performing categories in the final quarter of 2016. This quarter saw a rise of 7.1% year on year and was driven by several key sub-categories, including roofing products.

This growth is particularly encouraging given the fears for the future of the industry following the Brexit vote mid-2016. Despite concerns, the BMBI report and the BMF’s own sales indicators confirm that the final quarter of 2016 wrapped up three years of growth in the sector.

At Midland Lead, we worked hard to support our merchants during the fall out of the Brexit referendum. We continued to enhance our offering by adding new products into our core range of ancillary products and by developing a selection of counter display units. This increased the end user purchase appeal of our best selling products and boosted merchant sales.

Andy Williamson, BMBI expert for roofing products and IKO PLC group managing director, is positive about the year ahead. He believes that despite a turbulent 2016, there are already indications that roofing should hold up well this year: “The National House Building Council (NHBC) recently announced that the market has remained resilient, with good regional growth. Alongside this positive news, the RICS Construction Market Survey conducted at the end of 2016 saw expectations for workloads regain lost ground following Brexit. Both are indications of a good 2017 for roofing.”

At Midland Lead, we also think that the roofing sector has reason to look forward to a steady, possibly growing market in 2017. Alongside news that the NHBC saw a steady 2016 for house building, The Construction Products Association has also reported that house building is likely to increase. This is complemented by the fact that first time buyers are slowly getting to grips with house seller and government supported schemes and incentives, giving more credibility to possible sales increases in 2017.

It is worth noting that there will be a range of factors, as always, to negotiate. Economic uncertainty is likely to be the largest expected constraint on sales over the next 12 months, along with uncertain future demand and the impact of rising prices. But with industry leaders predicting house building will rise in 2017, continued and sustained hunger for roofing products should remain an industry staple.

Our team of experts at Midland Lead are on hand to advise on any challenges this year brings and feel optimistic about forecasting growth for both the builders’ merchants we work with and ourselves.