It’s been a good year for many. Not so for some familiar names. But on the whole I would guess that 2017 will go down as a decent year for many of our installers and fabricators.

But could the good times be about to come to a halt again? Palmer Market Research has published it’s latest report into the UK window and door industry and state a number of factors are going to contribute and create significant headwinds for the market in the coming years. Yes, Brexit is one of them.

It’s not all bad news though.

2016 outperformed

Their latest report states that 2016 the industry outperformed forecasts. This is good news of course, and reflects a lot of comments I have heard myself, especially when it came to the second half of last year. I remember the months after the referendum all the way up to Christmas being absolutely flat out. I am guessing that a very strong second half was the contributing factor to the over performance.

They say that the market grew 1% in terms of volume and 7% in terms of value, rising to £4.5bn in 2016. This was due to a drive towards higher end products. A trend that many of us have seen and experienced in the past few years.

They go on to say:

This included significant growth in bi-fold doors and growing sales of foiled and mechanically jointed/timber effect PVC-U windows, the former up 9.3% in 2016 to 42,700 door sets.

We all know the popularity of bi-folds, and that will continue for years to come. But it’s also good to see timber effect windows being recognised as an area of growth within the sector too. Timber effect windows, timber look joints, flush sashes and all other things timber-esque are going to be a huge growth area in our industry, no matter what happens in the coming years.

It wasn’t great news for timber windows though:

The ‘trade-off’ to this growth was a slowing in the volume PVC-U market and a continuing decline in sales of timber windows – which have fallen in volume by more than 60% since 2000.

This flies in the face of the general commentary coming out of the industry that seems to suggest timber windows are enjoying a renaissance. Could we be wrong on that front? Is it only aluminium enjoying such a strong comeback?

Decent news on the conservatory front:

More positively, the report found that average installed prices of conservatories was up by 12%, while conservatory replacements saw growth of 6%, although this was offset by a decline in first time installations of 4%.

I am happy to see prices going up. For two reasons. Firstly, I think our industry is due some inflationary price increases anyway. Secondly, it might be a demonstration that installers are passing their price increases onto the home owners. The correct part of the supply chain that should ultimately be paying.

So, all good pretty much for 2016. The news goes downhill from there though.

Read the full Palmer summary and access the full report here

DGB Business

Market contractions coming

No sugar coating this one, Palmer Market Research doesn’t see good news for 2017, 2018 or 2019 either:

The report paints a complex picture defined by pockets of substantial growth but delivered against a forecast backdrop of market contraction – in volume terms at least – of 4% this year, 2% in 2018 and 1% in 2019 before a return to moderate growth in 2020.

“The industry has out-performed our forecasts last year but we’re now seeing near stagnation in the housing market, which is a tell tail sign of tougher economic conditions to come. This and the uncertainty around Brexit has led to a weakening of consumer confidence, which we expect to bite in the second half of this year and through next”, explained Robert Palmer, Director, Palmer Market Research.

He continued: “This is already contributing to a level of hesitancy among housebuilders, which will make government policy and continuing investment in the Help-to-Buy scheme, increasingly key going forward.

“The social sector may be less effected by Brexit but it faces its own budgetary pressures, while we expect some funding to be diverted to the replacement of cladding and improvements to the safety of high-rise buildings in the fallout from the Grenfell Tower disaster.”

If I was being honest, I think 4% is undershooting it. My sense of things right now is there are certain parts of our industry that lie in the volume part which are suffering more than most. I think that when the 2017 figures are crunched, 4% could be more like 5% or even 6%. Just my guess, could be wrong, but it’s my sense that certain areas and under-performing significantly and that could have an adverse effect on already negative figures.

The prospect of no growth until 2020 could be focus minds in the industry. But it might also motivate to defy the figures too. If 2016 was a year that over-performed, why not other years? 1% contraction in 2019 isn’t that large a number. There is a possibility that it could be turned into small growth.

There is no denying the headwinds in this report however. Certainty for business around Brexit needs to be found as quickly as possible. Easier said than done when you’re trying to negotiate and not give all your cards away. But until we arrive at that we won’t see the forward progress from business we would all like to see. The housing market problem is almost a permanent one now, and a slowing economy will only exacerbate that problem.

This downturn is predicted without any further shocks to the system. You have to wonder what level of damage something unexpected might happen. Our industry, whilst continuing to try to prove the figures wrong, should also be taking measures at this juncture to protect themselves from any damage that might be incurred during the coming years.

Read the full Palmer summary and access the full report here

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