Builders' and plumbers' merchants saw a strong recovery in 2013 and 2014, reversing the trend for householders to turn away from larger projects and towards DIY.
That is one of the findings of a new AMA Research report on the builders' and plumbers' merchant market, which grew 6% in 2013 and 9% in 2014 as the housebuilding sector recovered. And the overall trend remains positive.

"The impact of the construction downturn was initially more significant for the merchants, with DIY outlets benefiting from consumers switching major home improvement projects in favour of lighter DIY tasks," commented AMA director Keith Taylor.

"However, since 2013 the merchants have performed better than the DIY multiples, benefiting from the significant growth seen in housebuilding and some non-domestic new work in particular, and also the growth in house prices driving the residential refurbishment sector."

The report says the market is dominated by five organisations that account for around three-quarters of the market, and that since the economic downturn there has been consolidation as larger companies have acquired smaller, but established rivals.

Difficult trading conditions experienced in recent years have also led to increased competition from other channels, particularly internet-based operations.

The merchant market is price sensitive because of competition, cost of energy and fuel, volatile prices of raw materials and product availability. The report points out that while price increases boost market size they contribute to some margin erosion in merchant business, and especially on commodity and known-value items.

Buying groups continue to play an important role in the merchants market, particularly for regional and local merchants, and the sector has undergone some changes recently with mergers of leading organisations.

The upturn in construction activity since 2013 has also led to supply chain issues and shortages of products such as bricks and blocks, timber and roof tiles. However, some manufacturers have re-opened mothballed manufacturing facilities to address the issue.

AMA says that future prospects for the merchant market are relatively good optimistic and forecasts annual growth rates of 3-6% until 2019.