As 2016 starts to step it up a gear, there was an interesting press release from Pilkington the other day that signaled some cautious optimism from the industry over a two year period. Before I dig around and give my own thoughts on this report, here is the press release:
Businesses that buy and specify glass and glazing products expect to grow turnover by an average of 10 per cent over the next two years.
• The average firm expects to create at least three new jobs over the same period
• 32 per cent identified the construction of new homes as a key opportunity for growth
The UK’s glass and glazing industry looks set to experience a period of expansion over the next two years, with firms upping their headcounts and planning further investment in order to take advantage of a number of opportunities in the market, according to research from Pilkington United Kingdom Limited.
The study, which surveyed 318 Pilkington United Kingdom Limited customers across the supply chain – including fabricators, installers and architects – found that two thirds (66 per cent) plan to recruit more staff over the next two years.
A conservative estimate for the average number of jobs firms are hoping to create in the next two years is three per organisation. If replicated across the industry, this could mean thousands of new roles across the sector.
The expected uplift in job creation appears to be underpinned by a forecast increase in turnover for many businesses, with the average firm forecasting growth of at least 10 per cent over the next two years.
Investing in the future
The survey also shows businesses are planning to invest in developing new products and improving their infrastructure to capitalise on opportunities. Almost two fifths (37 per cent) said they plan to develop their product range while nearly a third (32 per cent) are planning to upgrade their premises or machinery.
Opportunities on the horizon
The research also highlighted that firms are anticipating an uplift in the number of new houses being built, something that was confirmed by the last Autumn Statement, in which the Chancellor announced the biggest house building initiative since the 1970s.
A third of businesses (32 per cent) said an upturn in the construction of new homes would allow them to grow, while a quarter (24 per cent) cited increased spend by property owners on energy-efficiency improvements and other retro-fits as a growth driver.
Nearly a quarter (23 per cent) said that the relaxation of the planning laws – a proposal introduced by the Government in the summer budget – was an important step in helping their firm pursue a more ambitious expansion strategy.
Andy McDowell, commercial director at Pilkington United Kingdom Limited, said: “There has been no shortage of pessimistic forecasts for the performance of the glazing market in recent years, and while many firms are still operating with caution, this survey shows clear signs of growing confidence in some parts of the industry. The commercial sector in particular is a buoyant market, with many of our customers citing healthy order books.”
When questioned about the greatest obstacle currently facing their business, the rising cost of materials came out on top with more than half of respondents (52 per cent) highlighting it as the biggest challenge in the two years ahead.
One in three respondents (33 per cent) said that low spend in the domestic market as a result of tough economic conditions would be the biggest challenge, while just over a quarter (27 per cent) named the cost of employment as the main hurdle.
Other challenges included lack of skills in the labour market (25 per cent) and sluggish spending in the commercial sector (23 per cent).
Perhaps surprisingly, overseas competition was named as a threat by just five per cent of firms, compared to 22 per cent that flagged domestic competition.
Andy McDowell added: “As a business we’re committed to working in partnership with our customers, helping them to achieve their growth ambitions, and this type of market intelligence ensures we are able to provide a better level of support as we have an in-depth understanding of the industry from their perspective.”
Read the original article on the Pilkington website
The challenges stated by Pilkington from their research backs up a lot of what I have been talking about for a while now. With 33% of their respondents saying that they think the biggest risk lies in lower spending on the domestic front due to tough economic conditions only proves my point that things aren’t as good as many believe.
I am surprised that the skills gap was only third on the list of concerns. This is perhaps one of the biggest long term issues our industry faces. As the senior generation of fenestrationists leave the industry, there are fewer and fewer coming in to replace them. It’s a crisis now, how much worse will it be in five years?
It’s not all bad. Their research has shown that a third believe the promise of a major new home building phase will be one of the biggest opportunities. A pinch of salt on that one. We’ve been promised this before.
According to their results, the average company expects to create three jobs over the coming two years. Given the current strains and stresses, this is probably a tall order. However, those jobs are much needed, given the lack of youth and skills we don’t yet have.
All in all, I think this is a mixed picture. There are positives and there are negatives. It only takes a small swing in the economy one way or another for the challenges or the opportunities to become a reality.