The latest report from the Builders Federation BMF Forecast forecasts that sales will level off, with revenue growth driven primarily by inflation, which will drive up the prices of goods sold.

The report projects builder revenue growth of 6.1% year-on-year in 2022, driven more by higher prices than volumes.

The BMF Forecast combines an analysis of merchant market performance from July 2014 to December 2021 from the Builders Merchant Building Index (BMBI) and an analysis of sales drivers to predict future sales in 2022.

BMF Economist Sarup Ubhi said: “Materials price inflation was initially expected to be moderate during 2022, with material supplies and rising inflationary pressures dominating over the past 12 months. However, the protracted conflict in Ukraine increases the likelihood that inflationary pressures will persist into 2022.

The main impact of the conflict on the supply of building materials is to increase the cost of energy and raw materials. The cost of lumber, steel, cement, glass and other energy-intensive products is expected to rise again due to the energy crisis. Commodity prices are also on the rise, with the March 2022 rise the highest in six months, which could further limit the supply of some products.

Producers are unlikely to fully absorb this price increase. As a result, cost increases are expected to occur at all levels of the supply chain.