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MP26018

MAPS BUILDING MATERIALS 1998

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Table of Contents

Executive Summary

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EXECUTIVE SUMMARY

This report concentrates on the materials used for building projects and classes the materials into three key market areas, timber products, other heavyside and plumbing.

The value of the market for these building materials is estimated to be worth £11.4bn in 1997. The majority of sales are through the more traditional outlets, builders merchants. The builders merchants are becoming increasingly aware of a threat to their business from the major DIY sheds.

Overall building and construction output was almost £57bn in 1997. This was only slightly higher than the 1990 level in current prices and 24 percent down on 1990 at constant prices.

Housebuilding and housing RMI accounts for 40 percent of all building and construction, with new housebuild 33 percent of this sector. New housebuilding is on a rising trend with consumer confidence at high levels and unemployment at very low levels. Private sector building accounts for the majority of work. RMI in housing is substantial in both public and private sectors and has been less volatile over the last few years, in comparison to new build.

Commercial and industrial construction has remained a difficult environment throughout the 1990s. New build is 11 percent down on 1990 at current prices, or 33 percent down in constant prices. While RMI has increased by 16 percent, overall commercial and industrial output is down by 3 percent (in current prices) in comparison to 1990 levels.

Exclusive NOP consumer research commissioned by Market Assessment shows cement and timber as the most popular building materials purchased by adults in the previous twelve months. This is most likely due to the wide range of applications for these products. The research also shows how building materials have a very strong male bias. In addition, the 25-34 year old age group and those in employment are more likely to purchase building materials.

The mix of building materials by sector is heavyside 52 percent, timber 38 percent and plumbing 10 percent. While plumbing is the smallest sector, it is also the fastest growing and most fragmented.

Heavyside includes Roofing & Insulation, Bricks, Blocks & Concrete products and Cement & Plaster. Bricks, blocks and concrete products accounts for the majority at 43 percent, though roofing & insulation is the fastest growing sector. The timber sector includes manufactured products, sheet products and sawn or planed wood, with sawn and planed accounting for he majority art 44 percent. The plumbing sector is pipes and fittings, with growth in the plastic sector motivating overall growth.

Distribution of building materials is dominated by the trade builders merchants accounting for 43 percent, direct distribution accounts for 29 percent, with specialist channels and the DIY multiple retail outlets account for the remainder. The DIY retail outlets have widened their services and stock to accommodate the jobbing builder and the builders merchants have had to change their services accordingly to maintain their distribution share.

There are a number of major national and international suppliers of building materials with Hanson, Tarmac, RMC, Redland, Ibstock, Marley, Blue Circle, Rugby and Meyer important in the heavyside and timber sectors. In the plumbing sector Hepworth, IMI, Caradon, Blue Circle, Marley and Polypipe are important suppliers.

By 2002 the market for building materials is expected to grow by 16 percent. Average earnings is expected to show steady growth of 4.5-4.8 percent per annum while inflation is forecast at around 2.5 percent per annum. New housing output is forecast to increase while contractors output in industrial and commercial sectors is expected to show modest growth.

Text © 1998 MAPS

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Last updated by Duncan Nottage 7th February 1999