Tomorrow’s budget can’t come soon enough for merchants

A new survey of general builders’ merchant branch managers, which measures expectations and confidence, has found that the upcoming budget announcement has been a big contributor to the uncertainty felt in the market for a while now.

In total, 42% of merchants found economic policy had a significant impact on market confidence. Overall, merchants’ confidence in the market is poor. Only 21% of merchants are more confident in the market this year than they were last year – and the top reason for being more confident is believing it can’t get any worse and that the general economy therefore will have to improve.

Reasons for being less confident than at the same time last year included economic uncertainty and low expectations from the upcoming budget, government policy, low levels of demand and competitive pressures.

Some voices from the industry on the lack of confidence in the market:

“We've got no clear idea on what's happening, people have got no idea what is going to happen with the budget.”

“Because of what the government are doing, the budget that's due next week, interest rates. Landlords are not spending money on their properties.”

“Nobody can predict it, but who knows what the budget will bring. People are a little bit twitchy or being careful with their money as they don't know what to expect. Also, there may be an impact from what’s going on in other parts of the world - the global market does affect the business.”

“I would say political motivations; the budget doesn't sound like it's going to help business any more than it did last time around. We are going into winter when people’s income is under more pressure. We are seeing fewer people investing in their properties and gardens, people are sitting on their cash.”

“The upcoming budget has got people thinking, especially with the expected tax announcements in the budget. Depending on when the budget comes out and what they have to say, the government can have a lot of impact on the building trade.”

“It's the budget coming up, people have no confidence in the budget and no confidence the government we've got in at the moment.”

Beyond the uncertainty and economic factors, the biggest problems experienced by merchant branches in the past quarter were squeezed margins, online competition and supplier price rises. Those same issues were seen as a problem for more than 1 in 2 merchants.

The survey also found that the majority of merchant branch managers expect to see flat or declining sales in Q4 2025 compared with Q4 last year. Overall, 30% of the merchant branches surveyed did expect sales to increase at a low rate, but with sales growth driven by internal factors rather than any improvement in market conditions.

The findings are published by MRA Reports in a new quarterly report on the builders’ merchant market, which combines the findings from a new series of ‘The Pulse’ surveys tracking merchants’ sales expectations and confidence each quarter, with a set of forecasts specifically for the builders’ merchant market.

To find out more about the report or to subscribe to quarterly updates, please send an email to hello@mra-reports.co.uk.