Second best quarter on record but signs of a slowdown

Total value sales in Q3 2021 were 17.2% higher than Q3 2020, with one fewer trading day this year. Eleven out of the 12 product categories sold more over the period. Timber and joinery products led the field (+43.9%) with its highest-ever quarterly BMBI sales, contributing significantly to overall growth. Excluding timber, total merchant sales still grew by 9.6%. Like-for-like-sales increased by 19.1%.

Comparing Q3 2021 with Q3 2019, a more normal pre-Covid year, overall value sales were up 18.4% with one fewer trading day this year. Six categories sold more, led by timber and joinery products (+48.9%) and landscaping (+30.2%). Like-for-like sales were up 20.2%.

Quarter-on-quarter, sales were down 2.4% in Q3 compared to Q2, despite the three extra trading days in Q3. Five of the 12 product categories sold more in Q3. Kitchens and bathrooms (+7.4%) and timber and joinery (+4.8%) performed best, while landscaping was weakest (-22.5%). Like-for-like sales were 7.0% lower than in Q2.

A robust September performance contributed to Q3’s performance, with total merchant sales 6.2% higher than August, with one more trading day. All bar one category sold more.

Compared to September 2020, total sales were up 14.9% in September 2021. Timber and joinery products (+38.7%) did best and continues to outperform other categories. However, kitchens and bathrooms (+11.8%) also recorded its highest-ever BMBI monthly sales.

Total value sales in September 2021 were 24.5% higher than the same month two years ago, with one more trading day this year. Much of this growth is owed to timber and joinery products (+54.1%) and landscaping (+40.2%). Without these two categories in the calculations, the two-year growth is still strong at +13.3%.

The Q3 BMBI index was 146.1, with nine of the 12 product categories exceeding 100. timber and joinery (191.9) and landscaping (184.0) continue to outperform other categories by some margin. However, heavy building materials (133.3), ironmongery (126.2) and kitchens and bathrooms (125.3) also did well. Renewables was the weakest category (71.2).

Commenting on the results, Mike Rigby, CEO of MRA Research, which produces the report, said: “This year has been just as unexpected as 2020 for merchants, but for more positive reasons, with the most recent quarter showing a continuation of the strong growth experienced throughout 2021. Year-to-date, the sector is up by 36.2% in value over 2020, and 15.1% ahead of the same period in 2019. That’s way ahead of growth forecasts made at the beginning of the year. However, the sector is now starting to see the first signs of easing as price increases take over from volume sales to drive value growth.

“Housebuilding and infrastructure projects continue to boost sales, with heavy-side activity – such as the astounding growth of timber and landscaping sales and the strong performance of heavy building materials – driving growth.

“The final quarter of the year is likely to see a slowdown in demand, as merchants’ sales return to more manageable levels after an exceptionally busy year. Supply chain problems seem to be easing, but a consensus in the market suggests these could persist until 2023 so we are not out of the woods. But it’s safe to say, that end of year figures will be noticeably ahead of initial forecasts in an exceptional year.”