Together we are stronger

23 October 2019

Getting Brexit wrong has far reaching consequences but by working together the building products sector can rise to meet the challenges, writes John Newcomb, CEO of the Builders Merchants Federation

By the end of this month we may know for sure if our future lies outside the EU, or we could see the Brexit can kicked down the road yet again. As a members’ organisation the Builders Merchants Federation (BMF) has not taken a position on the merits of leaving or remaining, but it is clear to us that continued uncertainty is badly serving the construction industry and the merchants who supply it.

Sales data produced for the BMF and published monthly in the Builders Merchants Building Index has tracked the ups and downs of sales values this year. Total merchant sales in Q1 were up by 5.9% over Q1 2018, driven by timber and joinery (+6.6%) and heavy building materials (+6.8%). Though partly weather related, the high volumes in the fi rst quarter refl ect contingency planning prior to the original Brexit date of March 31, as everyone increased stock levels to ensure continuity of supply.

Conversely the second quarter saw weaker year-on-year growth in demand. The top line value indicator for Q2 2019 versus 2018 shows timber and joinery stable at -0.1%, balanced against minimal timber increases and a slight decline in sheet materials.

Ongoing economic uncertainty led the BMF to revise its industry forecast of merchant sales for 2019. Downward revisions for scenarios based on a soft and hard Brexit, now show annual growth at 2.9% (previously 3.8%) and at 2.6% (previously 3.4%) respectively.

Getting Brexit wrong has far-reaching consequences, yet most politicians have little or no grasp of how materials and products arrive at the end user. The BMF takes MPs to visit merchants in their constituency to explain their role, value and importance. For example, Hilary Benn, Brexit select committee chair, visited Howarth Timber and, whilst he was Lib Dem leader, Sir Vince Cable visited Alsford Timber. We are taking more members to our second Parliamentary Reception, at the House of Commons this month, where Nadim Zahawi, minister for business and industry will be speaking.

Post-Brexit trading issues – particularly relating to VAT, customs duty, dockside delays and timber imports – are top of the agenda in our dialogue with key ministers and MPs.

We voiced concern with HM Treasury on VAT and paying 20% more upfront on imports under a no deal Brexit and successfully persuaded ministers to allow postponed accounting, enabling members to account for import VAT on quarterly returns.

We are lobbying against other bureaucratic or financial burdens resulting from no deal, including the move to replace CE Marking with a UK Conformity Assessment Marking.

Productivity is also key. As cities prepared to introduce clean air zones we argued that merchants have no choice but to use diesel HGVs to deliver heavy materials, persuading local councils to modify proposed fees and other criteria.

With BMF member numbers above 700 for the first time since 1992, we now have a voice that can and will be heard. There is no doubt that “Together we are Stronger” – the theme of this year’s Members’ Conference.

We will no doubt face significant challenges and changes in a world post Brexit but I am confident that by working together we can rise to meet those challenges.

John Newcomb