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21st April 2017
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Plumbers merchants market forecast to increase by 4% in 2016
The plumbers merchant market was worth an estimated £4bn in 2015, having recovered strongly in recent years. The market value declined during 2011/12, reaching a low point in 2012.
From 2013 onwards, demand has increased leading to greater demand for plumbing materials, bathroom and shower products, and the plumbers' merchants market is forecast to grow by around 4% in 2016.
Increasing demand has been due to the improving economic climate in general since 2013, with demand increasing for both new work and RMI activity. Output growth, which has been particularly strong during the past 2 years, was also experienced across most construction sub-sectors, including the housing and commercial sectors, such as offices, retail and entertainment and leisure.
However, price competition remains fierce and this may influence margins going forward. In order to differentiate themselves, some plumbers merchants have invested in improving the overall customer experience through enhanced service, such as extended opening times, greater availability of stock and heightened promotional activity. Many have also expanded their online presence, to ensure that they compete with rising internet sales. The growth of multi-channel merchanting, which combines physical premises with an online store, is forecast to continue.
Consolidation has been a feature of the marketplace in recent years, as nationals have acquired smaller regional operations in order to extend their reach and range of services. However, many regional and independent merchants have performed well, with some expanding their number of branches to improve their product offering and stock levels to meet local needs. This has been coupled with a focus on facilities which appeal to the public, not just the trade, such as bathroom and kitchen showrooms.
At present, the price of imported goods is increasing due to exchange rate fluctuations - something which will contribute to an uplift in market value in the short term. The issue is likely to affect a significant number of product sectors in the longer term.
It is extremely difficult to forecast the impact of the outcome of the EU Referendum on the economy going forward. Several economic forecasts suggest that the UK economy will start to slow, with business and consumer confidence affected, potentially with lower GDP growth in 2017 and 2018. The situation may improve after this, depending on the outcome of trade negotiations, both within and outside the EU, which have yet to take place.
"While there are indications of a slowdown in growth in the housing and commercial sectors
from mid to late-2016, the plumbers' merchants market is still forecast to increase by
around 4% compared with 2015, with a further 2-3% per annum expected from 2017
onwards" says Keith Taylor, director of AMA Research, the company that produced this latest market report.
"However, the market value remains below levels seen in 2007.
"The market value is likely to increase in the short term, boosted by price increases, however, the outlook is more uncertain for the longer term. A strong demand for housing and an undersupply of homes is likely to continue to be a key driver supporting the plumbers merchant market in the medium to long term.
The 'Plumbers Merchants Market Report - UK 2016-2020 Analysis' report is published by AMA Research, a leading provider of market research and consultancy services
with over 25 years' experience within the construction and home improvement markets.
The report is available now and can be ordered via:
T: 01242 235724
11th November 2016