subject: Deep Research Report On Builders Merchants 2010 [print this page] Builders Merchants 2010 - Market Report Builders Merchants 2010 - Market Report
In 2009, the UK market for builders' merchants was estimated to be worth 11.1bn, which was 4.9% lower than the previous year's value as a result of the continuing downturn in the UK economy. ( http://www.bharatbook.com/detail.asp?id=161345&rt=Builders-Merchants-2010-Market-Report.html )
Since the builders' merchants market is heavily dependent on the UK construction industry, this Market Report includes analyses of construction output by key sectors housing, commercial, industrial and infrastructure new work and also repair and maintenance. Builders' merchants provide the large and diverse UK construction industry with a vast range of materials, products and tools, which can be classified into three broad categories: heavyside materials, such as bricks, cement, concrete building blocks, gravel, roofing tiles and sand; lightside materials, such as electrical wiring accessories, floor and wall tiles, heating/plumbing equipment, ironmongery, nails and other fixings, and paints and other decorating materials; and tools/tool hire, including power drills, generators, hand and power tools and pumps. Builders' merchants are also used by DIY enthusiasts.
The structure of the builders' merchants market is highly concentrated with a small number of very large companies having dominant positions. There is also a considerable degree of foreign ownership by European companies.
The downturn in the UK construction market has been reflected in the performance of builders' merchants, which have experienced a period of difficult trading. This has led to a reduction in the total number of branches across the UK. This makes increasing competition from DIY stores which also attract business from small contractors all the more serious. One major DIY store is in the process of opening trade facilities at some of its branches, but it is too early to assess how successful this venture is likely to be. Builders' merchants have been seriously affected by the much-reduced number of houses now being built, even though the UK is in need of more housing.
The impact of difficulties in the UK banking sector was reduced by massive government investment in the sector, with the result that the Government now has a significant stake in some UK banks. This support was arranged at the price of huge government borrowing, which has now to be repaid. As a result, widespread public-sector cuts are now being introduced by the new coalition government and it is almost inevitable that this will bring with it reductions in public-sector construction work. It is also very likely that this will lead to reduced construction in the private sector.
The UK economy has shown a small recovery and there has been a recent upturn in construction output. Provided that progress can be made and the UK does not experience a 'double-dip' recession, there should be a slow recovery in the builders' merchants market over the next few years.
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