Future forecasting with market data

by John Newcomb, CEO of the BMF
26 February 2019


While change has always existed, it does seem that we are currently living through a time of tremendous uncertainty. Our reaction to change is frequently negative. People fear the unknown and such uncertainty breeds unrest. A clear example of this is the deep division between those who think the UK is best served by leaving the EU, with or without a deal, and those who are equally convinced that we must remain in order to prosper.  

In our own industry, we may fear the consequences of a collapse in consumer confidence as Brexit continues to dominate the headlines. If consumers are not spending, what will be the effect on our businesses? Will investors think they are worth investing in? Is there any point in hiring and training staff if we have to lay them off down the line? Entire economies can be stifled at times of such uncertainty – often needlessly.  

It is not possible to stop the future from changing, but if we understand why and how it is changing, we can not only protect our businesses, but even give them a competitive advantage. The key is having access to accurate data.  

The BMF has been working on a new forecasting model for the building materials supply industry for some time. Our Builders Merchants Building Index (BMBI) uses data analysed by research company, GfK, to report on actual sales category performance. While this has enabled users to see which products and regions are currently growing, we have now gone a stage further to meet our industry’s need for accurate forecasting.   

Most forecasts tend to be based on lag indicators. Essentially, they use what happened last year to predict what could happen next year. The BMF model incorporates a number of lead indicators to signal future events that will impact our markets. 

Using the BMBI data coupled with advanced modelling techniques we have developed a channel specific forecasting model to show what is likely to happen in the next 12 months, making it possible for merchants and suppliers to forecast their customers’ requirements more accurately.    

Building Excellence in building materials supply  

Our new forecasting model is just one example of the BMF helping its members to Build Excellence in their business. Our latest member survey confirmed the value of other services and support offered by the BMF.  

An overwhelming majority, 98%, find the BMF both member-focused and member-engaged, whilst 95% agree we are passionate about adding value to members’ businesses.  

Overall, the top five services valued by our members are:  

- Legislation and regulation updates (98%)
- Networking opportunities (95%)
- Market data and business reports (85%)
- Specialist sector and job function forums (87%)
- Training (87%)  

The survey also confirmed the major factors affecting BMF members’ business over the coming year. Not surprisingly the B-word sits at the top of the list, closely followed by related concerns such as the economy, the availability/supply of products, price increases, together with skills and recruitment issues.  

In times of economic uncertainty, it is more important than ever to ensure that your business has access to accurate, relevant, timely and impartial information as well as regular points of contact with colleagues in your field. All of which enables you to build a 360o picture of the market to help you make the right decisions for your business.  

Whether you are a merchant or a building materials supplier, find out what the BMF can offer your business click here    


This article first featured in the February 2019 edition of Builders Merchants News (BMN)