Some of you may have seen on Twitter that I was kindly invited by the guys at MRA Marketing and Deceuninck on a trip to Belgium to visit their vast recycling facility in Diksmuide and their manufacturing plant in Gits. It’s massive by the way. I will be writing more about that in the coming week as a lot about the future direction of our industry was discussed and absolutely must be explored on here.
Within our party of nine, you can appreciate that a number of subjects came up, both industry related and otherwise. And yes, the B-word came up as well, although not as much as I thought it would.
One of the points we talked about was the potential for an absolutely massive boost for the window and door industry in the UK. The caveat being a decisive move being made on the B-word in the coming weeks.
Easier said than done, but in the spirit of being positive, here’s the reasoning.
Like the vote, but bigger
If you cast your mind back to the period up to the EU Referendum vote, there was a noticeable drop in business activity as home owners and indeed businesses decided to wait upon the final result before making further spending decisions. I remember it well. Home owners were happy to obtain quotes and make appointments for us to see them at their homes. But actual decision making on those quotes dropped markedly in the run up to the vote itself.
The following Friday as the result was declared and our landscape shifted was eerie. The phones hardly rang at all. No one came in. We were all glued to laptops and phones, as most of the country will have been, trying to understand the ramifications of what had just happened. The weekend followed, with the media in the usual hyper-drive.
Then Monday came. Three days had passed and the country was beginning to come to terms with what had happened. The dust was settling and home owners appeared to begin to look at real life once again and understand that work had to continue. For us at our place, it was like a tap had turned back on. The phones were busy again. Clients who had been sitting on quotes for a number of weeks were coming back in their droves. The reality was, Article 50 had not been triggered, a new PM was to be decided as David Cameron had chosen to step down, the sun was still rising, there was no emergency Budget, the world had not caved in. Therefore, there was no reason at this time to hold back spending any longer. The following 6 months for our installations businesses was the best second half to a year for ten years.
As we have headed towards Brexit day, which has now been pushed back to April 12th, we have seen very much the same pattern of delaying spending decisions by home owners and businesses alike. Except that the scale could be much bigger than that of the lead up to the vote itself. I think it’s also something which differs depending on region. Let me show you.
This I thought was a great tweet from research firm GSK at the end of February. It shows reach region within the UK and their purchasing power. 100 is the average, anything above is good, anything below is obvious.
Look at that cluster of well-above-average red in the south of the UK. The purchasing power of this region is streaks ahead of everywhere else. Putting the B-word aside, this is simply an superb map in which you can determine, if you’re an installer or fabricator with national reach, how to plan your pricing strategies depending on which region to target.
But for the purposes of this article, that map is a good indication that no matter what happens with Brexit, the south and south east of the UK has more than enough purchasing power to keep that part of the world functioning. So political worries won’t really put the brakes on spending down there. North of that patch of red and it becomes a different matter. Those that are on average or below levels of purchasing power are also going to be the most sensitive when it comes to major national events like General Elections, economic recession, or in this case, Brexit.
Those with less purchasing power are more likely to hold on to their money until something more certain comes along. This is a very good illustration of the argument that so many businesses have been crying out for for months now. They want certainty for this very reason. Personally, I think that at this stage even a no-deal, no matter how unpalatable it would be, would at the very least give home owners and businesses a clear decision and be a line in the sand from which we can move on to the next phase of things.
Unlocking the money
Putting the argument for no-deal aside, an actual decision of some kind would unlock what now must be a huge backlog of pent up spending decisions from home owners and businesses. For months now people will have been considering whether or not to spend on big ticket items like new windows and doors until a firm route for the UK was known. Obviously we’re still not that this stage yet, and many are getting tetchy at the fact we still don’t know what is going to happen.
For businesses, the idea of another General Election or a second referendum will simply prolong the uncertainty for far too long. Each of those two options would prolong this process for months at a time, and will not have the effect of unlocking that backlog of spending. Moreover, both have the ability to muddy the waters even further as neither option currently demonstrates the chances of changing the game decisively.
What I hope those in power already know is that the sooner this phase of Brexit ends, the sooner we can move on to the next phase which is all about the future relationship and plans for the UK around the world. This is the more positive bit, well supposed to be anyway. But this phase can only start once the withdrawal from the EU is confirmed.
This is where my last shred of hope in our process lies. I know from three years ago that once a decision had been made, in that case it was a vote, it actually unlocked a wave of spending by home owners which saw a big boost for our industry. The same is happening now, but on a bigger scale. So the positive to draw from all of this is that as and when a decision is made, there is potentially a huge spending boost to come from the general public, which will be great news for the UK window and door industry. This time round, I think that could be a boost which could last a good 12-18 months, such has been the pause on investment and spending.
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