Crunch Time for Builders Merchants Market

PRLog (Press Release) – Jun 04, 2008 – Crunch Time for Builders Merchants

As the effects of the credit crunch continue to reverberate throughout the construction industry, research for a new report on the UK Builders Merchants market has found that the sector remains on a good footing to withstand the more difficult trading conditions forecast for 2008 and 2009.  

Whilst growth has now clearly slowed for the builders merchants compared with recent performance, the industry is set to increase sales turnover in 2008 and 2009, according to a new report from MTW Research.  In addition, a return to stronger growth in the medium to longer term is forecast, underlining the market’s resilience in overall terms.

At present, however, MTW suggest that there is likely to be a ‘tightening of belts’ by many of the merchants in 2008/9, due to the impact of the credit crunch and subsequent ‘softening’ of construction activity in a number of key end use sectors.  Profitability has remained under pressure in recent years and a downward trend is likely to be sustained in the coming months as merchants focus on maintaining or growing turnover share, rather than protecting profit margins.  Acquisition activity may also become more prevalent in the short term according to the report, as smaller merchants become more susceptible to takeover bids from the larger players seeking to consolidate their market position.

MTW’s “Builders Merchants Rank & Profile Report 2008” points to the strong likelihood of a return to profit growth by 2010, with pent up demand likely to support profit margins in the medium term, following the postponement of construction projects in 2008/9.  Overall, therefore prospects remain positive for the merchants in the longer term, with more difficult 2008/9 market conditions to be regarded as a ‘hurdle’, rather than any significant pessimism for the industry.  

Another key issue identified in the report is that average liability levels have remained relatively steady in recent years, with most merchants’ debt representing a reasonably comfortable 30% of turnover.  Whilst MTW have forecast growth to 2012 for total and average debt levels, it is clear that the industry stands in good stead to withstand a reasonable degree of pressure from the decline in business confidence in 2008.  

Alongside both the industry overview and ‘average’ merchant illustrations, MTW also provide a useful financial profile for the UK Builders Merchants, each with a key performance indicator chart enabling the reader to quickly gauge a competitor’s or customer’s recent performance in the market.  In addition, the report also includes full mailing address details and senior decision maker contact details for the builders merchants.  

The report is priced from GBP 375 and can be purchased from MTW Research by calling 08456 524324 or by ordering on MTW Research’s website, where a free sample is available to download, alongside further details on this and other markets in the building and construction industry.