The plumbers’ merchants market was worth an estimated
£4.2bn in 2017, representing growth of around 2% from 2016. The overall trend in recent years has been positive, and
early indications for 2018 are for a continuation of the modest recovery
experienced from Q3 2017 onwards, although there is still a degree of restructuring
activity, as major players adapt to changing conditions and slowing growth in
some key end use sectors.
Although the plumbers’ merchants market has experienced 5
years of growth since construction output recovered in 2013, there has been
considerable variation in the rates of growth between the various end use
sectors. Sectors that have been strong include housebuilding, while residential
RMI activity, a significant sector for plumbing & heating materials, has been
more modest. Some non-domestic sectors, such as infrastructure have remained
positive, but in the education, commercial offices and healthcare sectors there
was an overall fall in output in 2017.
Expectations are for more modest annual rates of growth
to 2022, for both new construction and non-residential RMI. Skills shortages
remain critical and are a major concern in the plumbing and heating sector,
with the skills gap said to be one of the biggest threats facing the UK’s
plumbing industry.
The plumbers merchants’ market, which comprises national,
regional and local merchants, is dominated by four major merchant
organisations, which together account for an estimated 65-70% share, in value
terms. These firms operate via a number of subsidiaries, each supplying a range
of plumbing and building products.
The main competitors for the merchants are the home
improvement retail and specialist outlets, as well as manufacturers and
suppliers that deal direct with the construction trade. There has been strong competition
from alternative suppliers, particularly online companies, retail outlets and
DIY multiples, which is being driven by a shift in customer buying behaviour,
with online shopping via PCs and laptops - as well as via mobile phones and
tablets - becoming increasingly popular among tradespeople.
Some of the major nationals have responded to recent
challenges in the plumbing and heating sector by restructuring and streamlining
their operations, which has led to a number of branch closures, as well as the
opening of new, more efficient outlets, enhancement of online and/or
multi-channel offerings and a stronger focus on digital technologies. This
focus on e-commerce has helped to offset some of the shift to internet-only
distributors.
Prospects for plumbers’ merchants are relatively
positive, although current political uncertainties surrounding the UK’s exit
from the EU and the consequences in terms of trade, business investment and the
availability of skilled labour are already affecting growth, and will continue
to do so in the short to medium term. While construction activity and output
levels will continue to increase, the rate of growth is expected to fall and
remain relatively modest to the end of the forecast period.
A stronger focus on energy efficiency and water saving
will continue to drive growth in the plumbing and heating sector, providing new
opportunities for merchants, and a growing number of merchants have already
expanded their ranges to include renewable energy and sustainable heating
products as well as water saving solutions. Ongoing changes to building
regulations will also boost demand for higher specification products.
The 'Plumbers Merchants Market Report - UK
2018-2022' report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242
235724.