It’s that time of year again. Where we all start to look back at the 12 months that have flown by, figure out what we have learned, and look forward to 2017 in what is sure to be an uncertain, exciting and potentially tumultuous year.
That trend has already begun, with the latest CPA report from UK glazing’s installer community. You can read the main points of that post and my own thoughts on it’s findings here.
I want to start my series of 2016 reviews with my own thoughts and opinions of this year, and also to ask installers as well as fabricators what they thought of this year via their own polls.
Solid year for many
It’s been a funny old year. Certainly one that many will not forget for at least a dozen reasons. These past 12 months have seen a procession of world changing events that had the power to really knock the UK economy and UK glazing way off course. The vote to leave the European Union. Donald Trump winning the US Presidency. Italy losing yet another Prime Minister plunging Italian banking in chaos again. The global tragedy that is the Middle East and it’s increasing risk of pulling world powers into the spiraling violence.
Yet despite all of this, the UK economy has remained fundamentally strong, and the UK glazing market has felt like a microcosm of that. Anecdotally, of the installers and fabricators I have spoken to, many have all said that 2016 has been a good year. Installers from the sense I get have had a pretty good year. I know at our family installation business, it has been a very good year. We hit our target with time to spare, which was higher than last year. We’ve all sat about 30-40 more leads each this year, and there’s three of us that go on appointments. Average order value is up quite a bit, and profit margins have been healthy throughout the year. On the business front, 2016 will go down as a good year for us, and plenty of other installers.
To gauge the opinions of installers and fabricators, I have devised two polls, both asking the same question. Before you move on, tap an option and help build a picture as to how the industry thinks 2016 has been on the business front.
Little Brexit effect
For UK business, including the glazing sector, the stand alone point was the EU Referendum. From the start of 2016, it was the vote that was the main driver of all major news. Predictions, prophecies and estimates were a constant in the lead up to June 23rd. Two terrible campaigns, one for Remain and one for Leave, tried to convince us one way or another.
However, it wasn’t until we neared the vote that we started to see any effects on UK business at all. Even as late as May, consumer spending continued in good spirit. The much predicted Brexit effect didn’t really start to take hold until June. A number of glazing industry mergers and acquisitions were on hold until the outcome of the poll was known. It was predicated that a vote to leave would derail these deals.
As we now know, the UK voted to leave. The value of the Pound dropped sharply, and sits 15% lower than it’s pre-vote level. The industry’s manufacturers sought to rectify the situation. Some moved quicker than others to implement swinging price increases. Some moved slower to absorb what they could and pass on only what they had to.
In the end, the acquisitions that were on hold went ahead in a flurry of industry activity that we had not in a very long time. In fact it triggered a longer streak of industry acquisitions that is still continuing and looks set to continue into 2017. Consolidation and further industry mergers look like they will be a standout marker during the course of the next 12 months. But I will cover that subject more in depth in a post to come soon.
The referendum came. The shock came with it too. Britain seemed to pause the Friday after the Thursday evening before. A political shock the world had not seen in decades. It took that Friday, and the weekend, for it to sink in and heads to calm. But for all those doomsday economic predictions, they simply did not materialise.
Although Sterling has remained lower, the FTSE 100, FTSE250 and most other economic sectors are strong. There was deep division in the business community, including the glazing sector, and the wider UK. Those rifts are yet to heal. There is much work to do on that front.
For many installers for the rest of the year, I feel as though many continued where they left off pre-vote. If you read the recent CPA report, the installation community seemed to fair pretty well this year, and many remain confident about prospects for 2017. There are one or two industry leaders however, who are expressing concerns for our industry in the coming years.
I’m more of an optimist. Although I think prices may rise further next year, I think home owner demand will stay relatively strong despite increases. So long as inflation remains steady, it shouldn’t knock consumer confidence or spending too much off course. Even if it rises to 2%, which is the Government target, or slightly above, I think we’re strong enough as a sector to ride that bump in the road out.
A side note on products
I just want to mention products very quickly. I won’t go into detail in this post on the product landscape this year, I have a whole other post planned for that. However, I do believe that 2016 has been the most diverse year our industry has seen for a very long time. In my review post on products which is coming soon, I’ll be looking at the top ten products, new and existing, that have made the biggest impact on our industry this year. In my own humble and often worthless opinion of course!
So, I think we can call 2016 a success, for installers, fabricators and syscos. We face a number of huge challenges this year, and survived them all. Although the outlook looks uncertain for the next year, we go into it in a strong, mostly positive position.
Please leave all feedback and opinion on this year and this post via the comments section below.
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