Total Builders Merchants saw the usual seasonal pattern in 2024, with a boost in the middle two quarters, but the Quarterly Builders Merchant Building Index was behind the equivalent quarter in 2023 for each of the four quarters, suggesting a tough year overall.
Within that, Landscaping which has a more extreme seasonal pattern was also behind year on year for the first three quarters but showed a slight year on year gain in the final quarter of 2024. However, performance is well behind the peak of 2022. Other sources also indicated signs of a slow-down in construction at the end of 2024, although the purchasing index remained positive.
Overall, the industry appears to be cautiously optimistic. The policy shifts from the UK Government change in the summer of 2024 have the potential to generate growth in the construction industry with a push for more housebuilding and faster planning permissions for large infrastructure projects. However, the impact of the National Insurance increases are projected by many forecasters to slow down economic growth, and inflation is expected to continue to exceed the Bank of England target rate of 2% for much of the year.
In addition, the global economy remains fragile, with a high level of unpredictability in terms of conflicts in Ukraine and the Middle East, plus the threat of a global trade war following the introduction of tariffs by the new US administration.
Within the industry, it is expected that many companies will continue to diversify to spread risk and the focus on sustainability will increase.
Reports from individual companies reinforce the perception of unpredictability. For example, Wickes reported a 2.6% rise in like-for-like retail revenue for the second half of 2024, with the garden project category one of the key performers. However, Homebase went into administration owing suppliers and other unsecured creditors more than £650 million.
Within the hose industry, the performance of the construction sector is an important factor, as is the DIY and gardening market. However, there are also other areas that drive the hose industry like the growing need for water pumps to remove flood water or irrigate agricultural land and leisure facilities.
Overall, predicting the short term future for the hose market remains challenging. As Val Gardner, Managing Director of Winster Limited, the leading hose and accessory company says “Like most businesses, our costs will continue to rise in 2025, with increases in wages, fuel and raw materials. However, we are optimistic that the economy and specifically the construction sector will start to see growth this year. In the meantime, we will continue to work closely with our suppliers and customers to ensure we all benefit from opportunities that emerge through 2025.”