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21st April 2017
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New report reviews developments in Builders & Plumbers Merchants' Market
A newly published AMA Research report into the builders and plumbers' merchants' market says that the sector is now dominated by four national organisations competing in a highly fragmented market, with many regional and local merchants. It also says that following a period of decline as a result of the general economic downturn and a fall in construction output, the market recovered in 2010 and maintained its value through to 2012.
It says that in 2013, growth in some key end-use sectors has created an increase in demand for merchants' products, leading to a value increase in the market during the year.
The 13th edition of the Builders & Plumbers Merchants market report provides a comprehensive analysis of the structure of the market and the key players within it. The merchants' main product sectors are also analysed including the product market sizes, mixes, trends and merchant shares. The report also provides a forecast of market prospects up to 2018.
The health of the builders & plumbers' merchants' market is directly related to the performance of the UK building and construction sector, influenced by both new-build and repair, maintenance and improvement activities. Following underlying growth to 2007, the impact of the economic crisis had a dramatic effect on the market, declining from its peak in 2007 of £13bn to an estimated £10.6bn in 2010. The market remained relatively flat to 2012 before growing in 2013 to an estimated size of £10.9bn at merchants selling prices.
Since the downturn the builders & plumbers' market has consolidated and is now dominated by four national organisations competing in a highly fragmented market with many regional and local merchants. To improve efficiencies in recent years, many merchants adopted appropriate strategies such as job losses, branch closures and delay of capital programmes. This activity has placed them in a good position to make the most of the emerging recovery in construction activity. This adaptability to changing industry conditions has helped to sustain the merchants' market.
The merchants' product range is large and varied, with some merchants focusing on heavyside products, others on lightside products and some are mixed merchants offering ranges of both types of product. The traditional building products still dominate the merchants' product mix, but performance of the different product groups has varied throughout the recent downturn dependent on the performance of the end-use sectors supplied.
In 2013 it is estimated that the builders and plumbers' merchants' sales accounted for just over 9% of the total construction output, indicating that the merchants remain an important distribution channel in the overall construction market. The main competitors for the merchants continue to be the manufacturers and suppliers that deal direct with the constructors, as well as DIY retail and specialists outlets.
As customers adopt a multi-channel approach to researching and purchasing products, having an online presence is becoming increasingly important to the merchants. Also social media is providing opportunities as a marketing tool.
Future prospects of the merchant's market appear more optimistic than in recent years as there is increased confidence in the recovery of the UK economy and that it will be sustained. Construction activity levels are increasing (particularly housebuilding), although there remains some vulnerability to events occurring in the Eurozone.
The various end use sectors are forecast to fare quite differently, with the public sectors generally expected to underperform compared to the private sectors. The builders & plumbers' merchants market is expected to continue experiencing growth to 2018, reaching an estimated £13.4bn.
For your copy of AMA Research's 'Builders and Plumbers Merchants Market Report - UK 2014 -2018 Analysis':
28th March 2014