The End Of Q1 Paints A Mixed Picture For UK Fenestration

As we approach the final day of the first quarter of 2018, I think it would be fair to say that it has been a pretty mixed picture for the window and door industry.

Fluctuating business, poor weather and external economic factors have created what you would call a “fluid” business environment. Now I am about to post my March review and I am also doing a full Q1 review too, coming up in the next couple of days, so this will be a brief overview of how I have viewed the industry in Q1.

Ups and downs

As you may be aware, I do try and keep an ear to the ground to try and get a feel for how things are in the industry. Nothing 100% scientific by any means, but I do try and speak to a variety of installers and suppliers during the course of time to build up a picture to how things are out there. As we leave Q1, that picture to me looks very mixed.

For example, there was a wide variety in when periods of the first quarter was busy or not. Some reported that January was unusually busy give the time of year, and then it fell away completely in February. For others it was the other way round, a quiet January with a rip roaring February. There seemed to be little consistency. It also seemed like there was a lot of regional variation.

March, as we know, was pretty poor weather wise. A lot of snow for a lot of people. No matter how tough the industry thinks it is, it will have put back fitting schedules and depressed footfall in showrooms where the weather was worse. Inevitably this will have had some kind of negative effect. So perhaps some business that home owners have since put off until the weather becomes better may well come good in April and May as we head into the warmer months.

As it happens, in a recent article on the BBC News website, it is estimated that the UK economy loses just over £1bn per snow day. I would say that we have had around five proper snow days in the UK recently. That would mean by rough numbers our economy has lost over £5bn in GDP thanks to the snow. Could there be some pent up window and door business in there?

For us, our January was pretty quiet. Plenty of leads and quotes going out to customers, but we sensed that home owners may have been sitting on quotes until their budgets improved. When it came to February and indeed March sales picked up massively, and at such a speed that we have had to take on another fitting crew to bring our lead time down from 10 weeks to five.

Q2 to bring boost?

Seasonally, this is where things are about to step up a gear. Home owners are getting out of hibernation and starting to look at what needs doing to their houses after another winter. The better weather is more inviting on it’s own to get out to showrooms to see what is out there. So from a window and door industry point of view, things can only get better from here.

That’s the theory anyway. Many will tell you that the seasonal norms haven’t really applied in this industry for a food decade now. When I joined 13 years ago you could bank on the quiet and busy periods. Then the recession came and at the same time technology really started to change our buying habits. So come out the other end of the bad years and suddenly those usual seasonal norms evaporated very quickly.

So whilst we will of course be hoping things get even better during Q2, there is no guarantee that the usual norms will play out. It’s also worth noting that on a domestic front the media is going to go into hyper drive. Negotiations with the EU are set to ramp up further as a time for a trade deal runs out. You can bank on the media making the most of that. I worry that any hype might just make a few people put their home improvement plans on hold in fear of uncertainty. Even though materially nothing on the ground is actually going to change any time soon. Then there is the situation with Russia, which isn’t going to go away any time soon either.

The window and door industry simply needs to keep the marketing ball rolling. It’s message needs to keep hitting the home owner so that they’re encouraged to keep thinking about their homes and not their pockets.

I would also keep an eye on the nationals during Q2. We’ll be due another trading update from Safestyle UK in this quarter, which will give us some early indications as to how the business and other nationals are performing. Will they be able to turn things around or will they be unable to stem the flow of sales and staff to other companies? We will find out in this next quarter.

I think we could also see a couple of M&A deals come good in this next quarter. There are a few irons in the fire so to speak, but whether they complete in time before the end of the second quarter we will have to see. There is still a lot of consolidation to take place in the industry, far too many companies per demand in regional areas.

We also have the Glazing Summit coming up in May, which you can find out more about here: https://www.doubleglazingblogger.com/event/the-glazing-summit/

There will be a lot to talk about at this gathering, and will be the first chance since the FIT Show to gauge the state of the sector and see what future it holds for us.

So, Q2 could be a busy one, and I’ll do my best to bring you the best of what’s out there on DGB as frequently as I can.