This week has been a good metaphor for the mood and state of the industry I think. Cloudy. Rainy. Gloomy. It certainly doesn’t feel like summer, and there’s no sign that it’s actually on the way.
The window industry I think feels a bit like that right now to be honest. And we should be honest about it. It doesn’t feel like the industry is firing on all cylinders right now.
I was sent a screen shot of a fitters forum on Facebook the other day. Some of you may be part of it. There are over 4o00 members of that group. The screenshot I was sent was of a discussion between installers who were talking about how quiet it was. Someone asked whether it was quiet out there, which prompted responses from plenty of others who agreed that it was indeed slow.
I have been speaking with suppliers and others at fabrication level. All the reports I get back are that it’s “up and down”. Which is code for, it’s not very busy. I get words like “bumpy”, “difficult” and “rocky”. Words used to politely describe business as being slow.
Even at the FIT Show I was being told that 2019 wasn’t exactly a booming year. The mood music coming out of the industry isn’t amazing. Very much like the weather.
That’s not to say that some aren’t doing well. I know that some manufacturers are having record years, which is obviously good news for them, they’re doing something right and something better than others. But these I think are smaller, brighter spots against a darker backdrop.
We need to be a little bit honest about this. I don’t expect people to be coming out on social media and declaring the end of days. But I think we all know that things are a bit difficult out there right now. I don’t think we’re going to call 2019 a record year.
A mix of all sorts
As an industry we’re going through a mix of external and internal problems which will all be contributing to difficult trading conditions right now.
Brexit will be the obvious one to point out. We’re now not due to leave the EU until Halloween of this year. The headlines will write themselves I’m sure. But as I have mentioned in previous posts, the period between when it was decided to postpone until then and Halloween itself is long enough for some home owners and business to decide to hold on to their money until we have actually left and the lay of the land is known.
The weather may also be having a small part to play as well. We’re certainly not having the kind of summer we had last year. This time last year it was baking hot, sunny every day, we were even moaning that a bit of cloud cover and rain wouldn’t be a bad thing. Well we have had plenty of that this summer so far, indeed this week has been truly garbage. Its not the kind of weather that is going to inspire home owners into the showrooms or to even look externally at their houses to see what work is required.
We’re also coming to the end of an economic cycle. Typically they are roughly every ten years. The last recession we had was the Great Recession in 2018/19, so we’re ten years from that as it stands. Cycles can last a bit longer, perhaps 12 years. Which if this is the case, we’re probably seeing signs that things are winding down a bit now. No one is suggesting that another big recession is on the way. But China has come out this week with disappointing economic figures, and many see the second half of 2019 slowing down significantly for the US. Globally, it does seem we’re entering into a period of slower or stagnant growth.
I also think that the industry remains over-populated with companies. Given the demand out there, I still think there’s too many installers and fabricators. So as we enter a slower period of growth, we could see a period of consolidation where M&A activity steps up. We already know that a number of companies have the “for sale” sign above their heads. I would suggest that much of the industry in reality is up for sale. I know of a few people and companies actively look around the sector for acquisitions.
I don’t think we’re headed for times as bad as ten years ago. They were truly exceptional circumstances. I don’t think that if we were to leave the EU without a deal that it would be the end of the world either. But, I do think that Europe, indeed the rest of the world is headed into tougher times generally. As an industry, this means we all have to get our heads down and work even harder. Increase marketing. Push harder on USPs and give people even more reasons to buy from you. Now is not the time to roll over and hope everything turns out alright. It’s now that the better businesses will thrive and the ignorant or lazy will fall.
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