We have come to the end of the first working week of the New Year. Well done everyone! We all know how much of a slog it is to get back to waking up early at the crack of dawn, when it’s dark, cold and you have to scrape the car from frost every morning. For some of us at least.
I have been very surprised to see quite a few glazing companies not open until Monday 9th January. That seems like a very late open to me. Especially when the majority of the general public are back at work, as are schools and most fabricators too. So, if you’re one of the ones who decided to have an extra long holiday, looks like you might have missed out.
Now, this is not based on any sort of hard numbers, as we’re only four working days into 2017. But, it appears as though 2017 has immediately picked up where the end of 2016 ended. We’re off to a flyer!
Very positive commentary
Was I the only one who thought December was almost as busy as the rest of 2016? Usually you can count on the last few weeks of the year dropping off a cliff as people forget about windows and doors and have fun with all of what Christmas brings. It didn’t feel like that this time round. In fact, at our place, we did a record December, at least whilst we have been in charge of the business.
As we drew near to the end of the year, despite what was ahead in 2017, there was still an abundance of confidence, at least from installers. This flew in the face of rising costs from fabricators, creeping inflation, Brexit and the triggering of Article 50 in March and the general uncertainty that is predicted to come.
From what I have seen personally so far, and the comments I have had from my installer friends and the suppliers I deal with, 2017 is off to a total barnstormer! Why would you want to stay closed until next Monday?
As I said, there’s no figures about to show the levels of business activity yet, but it doesn’t take a genius or research to know that things on the ground have got off to a pretty positive start. Despite it being just after Christmas, home owners appear very willing to spend on home improvements. At least round our neck of the woods. By the end of our first day back we had confirmed business that took us over half way to our January sales target. If it continues in the same vein, we’ll be working on February’s target in no time.
This positive start has led to installers having busy fitting schedules. A few have told me that they already have work booked in to the start of March. Impressive work, and will ensure cash flow is healthy for a long time to come, even if sales take a dip for some reason. All of this should be sounding good to installers and fabricators across the industry.
But can it continue?
Can it last all year?
A swallow doesn’t make a summer, as the saying goes, and there is still the chance that we have had a bit of a New Year bounce, and normal January service might resume before long. It could be a possibility. We could see leads fall flat and home owners decide to pay down credit card bills instead of buying new windows and doors. It could happen.
I personally don’t think it will. The mood music coming from home owners is too positive, too strong at the moment. A lot of home owners we have seen before and after the festive period were expressing their views on staying put and improving what they had instead of moving. Scenarios like this mean home owners start to spend the piles of cash they have been saving, originally earmarked for a new home, on improving their existing home. So long as that scenario continues, we’re good.
There are some bumps in the road however which could derail that positive sentiment. To start, we need to keep an eye on inflation. Right now it’s at 1.1%, which although it has risen, is still historically very low. The Government’s own target is 2%, so we’re still a way off from that. So long as we can stay around that level, and ensure the cost of every day living doesn’t rise too sharply, that will be one bump navigated.
Another potential bump is a very obvious one, and that is Brexit negotiations. PM May insists Article 50 will be triggered by the end of March. We don’t really know what will happen from an economic perspective when that happens simply because it has never happened before. It could pass without event, it could set the markets off. We’d prefer the first one. We don’t want any exaggerated effects that could affect consumer confidence.
The rising cost of glazing materials is also an issue. We don’t really want Sterling to drop any further below the levels it’s at now. If it does, we risk another round of cost increases being passed on to installers. The dilemma then is whether installers eat that cost up, or pass it on to home owners. The risk in doing the latter is if the whole industry decides it’s the home owners who should be paying, we risk dampening their spending power. Something we don’t want. It would be a fine balance to find.
These are all hypothetical scenarios of course. All of the above might not happen. All might run surprisingly smoothly and business in the UK glazing sector may continue to operate positively and profitable for all during 2017. Lets hope so.
By next Monday the whole industry will be back to work and at full strength, perhaps then we will get a sense of the wider state of play. I’m hoping that the positive commentary continues, and the various communication outlets continue to be populated by positive comments about leads, sales and profit margins.
Make hay while the sun shines and all that!
To get weekly updates from DGB sent to your inbox, enter your email address in the space below to subscribe: