According to a new report from AMA Research, the builders and plumbers merchants market has seen a strong recovery during 2013 and 2014, following a period of relatively poor market performance, reaching growth of 6% in 2013 and 9% in 2014.
This was due to the house building sector in particular starting to recover, with other key sectors that have stimulated demand for merchants’ products including offices, infrastructure, industrial and education. Indications are that growth was slightly lower in 2015 at 4%, though the overall trend remains positive.
In 2014/15 it is estimated that merchant sales accounted for around 9% of total construction output, indicating that the merchants remain an important distribution channel in the overall construction market. The merchants offer an extensive range of products, with the traditional building products still dominating the merchants’ product mix. Plumbing and drainage account for around 17% and heating and ventilation for around 15%, with other sectors commanding smaller shares.
The market is dominated by a leading group of five organisations who account for an estimated share of over 75% of the market. Since the economic downturn, the merchant market has undergone some significant structural changes, with the market consolidating as some of the larger companies have acquired relatively smaller, but established merchants. Difficult trading conditions experienced in recent years have led to increased competition from other channels, particularly Internet-based operations.
Future prospects for the merchant market remain relatively optimistic with increased confidence in the continued recovery of the UK economy and that it will be sustained. Construction activity levels are increasing, although the rate of growth is thought to have slowed slightly in 2015 and the rate of recovery remains vulnerable. However, forecasts are broadly positive, with growth rates of between 3-6% per annum forecast until 2019.
The report Builders and Plumbers Merchants Market – UK 2015-2019 Analysis can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.