This article was first published in the Professional Builders Merchants magazine.
The first issue of The Pulse, a series of monthly tracking surveys by MRA Research into merchants’ confidence and prospects, finds builders’ merchants in confident mood. This edition looks at expectations and confidence in May 2019.
A slightly higher percentage of merchants (net +69%) thought sales would increase compared to May last year. Merchants in the Midlands were the most positive with a net +78% expecting sales to increase.
A net +17% of merchants were more confident in May than they were in April. Confidence was highest in the North of England at a net +30%.
A net +12% of merchants were more confident about the market in May than the same time last year. The survey showed that confidence in the market differed between regions. Merchants in the South and Midlands were the most confident, with a net +18% and +17% respectively feeling more confident than the same period last year, while a net -7% of merchants in Scotland felt less confident.
Among those that were more confident, the sentiment was very positive, and a number of respondents commented that market conditions appeared more favourable and that sales and activity had picked up recently. Many merchants also said they considered Brexit to be less of a worry than it was a year ago.
But of those who were less confident, around 75% said it was due, at least in part, to Brexit and the continued uncertainty. Other reasons included the current economic climate, political uncertainty and increasing competition.
When asked about confidence in their business or branch, merchants were even more positive. A net +38% of merchants said they were more confident now than they were the previous month (April). Merchants in the North and Scotland were the most confident (net +50%).
Compared to the same month last year, a net +45% of merchants were more confident about the prospects for their business or branch. Builders’ merchants in the North had the highest confidence level with a net +57% of merchants more positive than last year.
Issues affecting merchants
Merchants were also asked about problems they had faced in the last month (April). Only 5% said they had no problems, while 70% had experienced problems with supplier service and availability.
Single biggest problem
Merchants were asked what their single biggest problem was in the last month (April). Supplier service & availability topped the list at 34%, but 16% of merchants had suffered from online competition, and 9% had been hit by price-cutting in the market.
Most important challenges for construction
Merchants were asked, in an open question, what they thought were the three most important challenges the construction industry faces today.
Responses were grouped into categories. The top three concerns among merchants are Brexit, mentioned by over half of the merchants interviewed (55%), availability of supply and product shortages (35%), and skills shortages (31%).
The Pulse is a monthly trends survey that tracks builders’ merchants’ confidence and prospects over time and is produced by MRA Research, the market research division of MRA Marketing. Find out more here and look out for the next report in the September edition of PBM!