Can builders merchants celebrate the recovery of the industry?

Many business sectors across the UK suffered during the most recent recession, as a number of national brands closed their doors for good. But perhaps it was the construction industry that saw the biggest downturn. Unfortunately, there were a number of casualties as money was pulled and work dried up, affecting everyone from builders merchants and large developers, right down to the small contractor.

But, with the economy slowly on the rise, a buoyancy in the property market and work beginning on a number of different frozen projects once again, are things really beginning to pick up and can builders merchants begin to celebrate the recovery of the construction industry?

 

What went wrong?

With many companies at the top tightening their purse strings to safeguard against a potential major crisis, the number of construction orders began to dwindle, as developers simply did not have the funds to begin projects, or even finish some that had been started.

This had an effect on builders merchants across the country as large orders were not placed and fewer customer were making visits.

December 2008 saw the industry at its lowest point and shrinking at its fastest pace, putting it in its worst position since records began.

The biggest decline was in the housing sector as banks and building societies began lowering the amount they were lending, making it harder for people to buy and lessening the demand for new builds.

 

Are things brightening up?

In simple terms yes!

Whilst construction levels have increased across all sectors, and builders merchants are seeing an increase in orders and visits, the continued reported revival in the housing market, and the relatively new Help to Buy Scheme, have allowed the house-building sector to be the biggest winner.

Companies are beginning to hire tradesmen and women again and there has been a surge of activity across the county, which will see work start on 180,000 new homes over the coming year. This has helped the industry so much, that in November 2013, it was this, according to the Market/CIPS purchasing managers index, that has helped to drive construction activity to a six-year high.

Public spending has also increased slightly, providing more good news for builders merchants, with major building projects that include roads, schools and other public buildings ensuring continued employment for those in the industry and those that supply it.

 

How can builders merchants safeguard against future recession?

That is a difficult question to answer as there is no definitive response that can provide safety against a recession.

There are obvious things that builders merchants, and any company, can look at, such as cutting costs, continuing to market their business, expanding their skill set and becoming more competitive on costs, but when the industry is so reliant on outside sectors, there is no quick fire solution.

Although there is still a way to go until the industry reaches pre-recession levels, any boost that helps build confidence, gets tradesmen and women visiting their builders merchants again and gives the industry a kick start is certainly good news.

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