030 GGP 1216

GGP 12 December 2016

COMMENT The window market – redefined New research by Palmer reveals that while the home improvement sector has contracted The Window, Door and significantly, installed value has held its own. GGP reports Conservatory Markets in Housing in Great Britain, published recently by Palmer Market Research may not be entirely comfortable reading. With the potential fall-out from Brexit looming on the horizon in 2017, Palmer is cautious about the industry’s immediate to medium term prospects. Forecasts of growth in new build of 32% over a five year forecast period through to 2020 in last year’s report have, just a year on, been replaced by those for contraction of 3% over the same period. “The Brexit vote has radically changed our view,” states the report. “We now believe growth in house prices – and in particular new build house prices – will slow during Brexit negotiations.” The authors of The Window, Door and Conservatory Markets in Housing in Great Britain, warn that the uncertainty that surrounds the UK’s severing of political links with the Continent, means it’s more likely that first time buyers will ‘hedge their bets’, delaying a move onto the property ladder. It adds that this is something which will not only impact on new “Since 2000 the market has drifted significantly south, but installed values have more or less held-up.” build, but may also depress the home improvement sector. Although Palmer suggests that retail will put in an above forecast performance, with growth at 1.5% to £3.28 billion by the end of 2016, continuing growth in from 2017 to 2020 is held to ransom by Brexit and its impact on consumer confidence. But while it may currently loom large on the horizon, Brexit is perhaps merely a ‘distraction’ because of the far more significant and far longer term trend. With its market research data starting in 1976, Palmer is uniquely placed to identify long term trends within the window and door industry and it’s this longer term analysis, which is perhaps most illuminating. Although the direct sell market fell by 1.1% in volume terms in 2015, it grew in installed value terms to £2.35 billion. Rolling this out to deliver a longer term view, analysis reveals that since 2000, the home improvement market as a whole has recorded a 36% drop in volume but at the same time its value has dropped by just 6%. “Since 2000 the market has drifted significantly south, but installed values have more or less held-up. This reflects growth in the second-time replacement market and also the shift in consumer behavior that has accompanied it, most notably towards higher end products, which has offset the fall in volume.” This is a key point. As homeowners have moved onto their second or even third-time purchase of windows, Palmer argues that evidence suggests that they are looking for something which delivers more, not just in terms of energy efficiency and security but crucially, aesthetics. The Window, Door and Conservatory Markets in Housing in Great Britain suggests that this is evidenced in PVC-U colour and woodgrain foils, which are reported as having recorded growth in share of two percentage points between 2013 and 2015. “One of the reasons for the increase in unit prices has been the trend towards premium products. For instance for PVC-U, which has 83% market share in the home improvement window market, there continues to be growing interest in colour and woodgrain finishes as there has been in the new build market,” says Palmer. He continues: “The growth we are seeing in foils, in colour and in premium PVC-U systems, is reflective of what we would suggest is a shift in end-user expectation as well as innovation within the market.” This shift towards premium products can also be extrapolated to the industry at large. According to findings published in The Window, Door and Conservatory Markets in Housing in Great Britain, a flattening of the market in 2015 saw total volumes fall by 0.7%. This was, however, offset by a shift towards higher-end products and higher value installations, which last year actually delivered a 2% increase in installed value to £4.20 billion. “If you draw a comparison between volume and installed value for the industry as a whole, it’s also worth observing that although PVCU makes up 82% of the market in volume terms, in installed value terms it actually slumps to 68%, wood shoots up from 10% to 19% and aluminium from 6% to 10%,” says Palmer. “In summary, the message is that there remain some very sizeable pockets of opportunity but these are highly variable defined by not only product type but material type and sector.” 30 www.ggpmag.com December 2016


GGP 12 December 2016
To see the actual publication please follow the link above