BMF BMBI Q3 2016 Report and Comment – OUT NOW

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This time of year is usually very good for roofing, however the market has been slower than usual. In terms of volume, Quarter 3 has been slower than Quarter 2 and the same period in 2015. Geographically, the North has been slower than the South. In use of material, there has been a shift from single ply membranes to hot melt, particularly in new build.

We’re also seeing significant movements in raw material prices, oil moving up and sterling gradually regaining ground.

Meanwhile, although Housing Repair, Maintenance & Improvement (RMI) is positive compared to the same period in 2015, it has slowed progressively during the year. In Q1 the market was up 10% on Q1 2015; Q2 was up 6% compared to the same period in 2015, and Q3 was 2.5% up on Q3 2015. Nevertheless, both new housing and RMI are up which is good for pitched roofs, with sales of breather membranes tracking housing trends.

The RMI slowdown is due to a combination of projects delayed for funding, and shortage of labour, but skills shortages affect the whole industry. For example, although Bellway built 12.5% more homes than 2015 from sales up 26.9%, Chief Executive Ted Ayres recently said lack of skilled labour was its greatest challenge. On some sites in London, he said, 70% of the workforce is from overseas. ‘Brexit or not, it’s our biggest constraint and we must get the Government to work with us to find a solution.’

It’s difficult to forecast what will happen to roofing in the next quarter – the market could do anything from -5% to +10% on the last three months. We live in strange and interesting times! The ‘brick boys’ will be OK – housebuilding is easier to predict, and infrastructure projects such as HS2 and the third runway at Heathrow have been given the go ahead. But predicting roofing is different and more challenging.

We welcome the investment in infrastructure and highways which are helpful for specific markets such as the battle against potholes where new product solutions exist, but the industry needs more than just investment in these areas.

Download the full 2016 Q3 report here