Monday, February 19, 2018

The UK health and education facilities management market declined by 2% in 2017


Over the last few years, the potential for growth in facilities management (FM) outsourcing within the healthcare and education sectors has been limited, largely due to factors such as political and economic uncertainty, cuts in public sector budgets and closure of a number of facilities. Growth within the market for outsourced integrated services and TFM in health and education has therefore been on the modest side. In 2017, the market was estimated to be worth £3.2bn – around 2% lower than in the previous year.

FM market growth has also been hampered by a decline in the number of large-scale projects undertaken. Although healthcare and education represent two of the largest Government departments in terms of PFI/PF2 activity, the number of schemes being signed off on a year-by-year basis is declining due in part to the difficulty in obtaining finance.
In both the healthcare and education sectors there has been a gradual trend towards bundled service and TFM contracts, largely at the expense of single-service varieties. That said, single service contracts remain prevalent within certain market sectors, such as catering in primary and secondary schools. The growing adoption of bundled and TFM contracts has had a positive effect on market value, since these tend to be higher priced. However, the reduction in the number of PFI projects, together with greater contract renegotiation, has limited growth within the TFM sector in the hospital sector.
Healthcare represents the larger of the two sectors covered by this report, although the sector is mature and has declined 3% within the last year. The sector has been impacted by pressure to minimise operational costs to protect frontline services, as well as ongoing rationalisation of the NHS estate as under-utilised premises are sold off. Acute hospitals account for a significant percentage of outsourced FM services, with outsourcing most commonplace in areas such as community health providers and general/acute hospital care.
FM outsourcing is less well-established within the education sector. In 2017, market value saw a small decline compared to the previous year, as growth was affected by restrictions on budgets. Outsourcing of FM services within education is heavily skewed towards primary and secondary schools, which account for almost three-quarters of market value.
Building, engineering & maintenance and cleaning represent two of the most commonly outsourced FM services within the healthcare industry. Although maintenance is also dominant within the education sector, back office functions such as administrative and clerical functions, along with catering, are also widely outsourced. Energy management is likely to provide opportunities in the FM sector.
The higher-level merger and acquisition activity within the FM market appears to have stagnated, most likely due to the current political and economic uncertainty and the low margins currently obtained in the contracted-out services sector. The market’s leading players have appeared more inclined to divest businesses rather than acquire them, in order to focus on core areas of expertise. Until its collapse, Carillion was one of the leading providers of FM services to the health and education sectors.
Fiona Watts of AMA Research said: “The outlook for the FM outsourcing market within healthcare and education is considered moderately positive over the short to medium term, although growth within both sectors is likely to depend upon the prevailing political and economic situation. Government encouragement of greater private sector involvement is expected to continue, providing some optimism in the market.”
A further boost to the market should arise from the continued shift away from single service contracts towards bundled service and TFM packages. This trend is likely to have a more substantial impact within the education sector, where single-service contracts still dominate in several areas. However, budgets are likely to remain restricted for the foreseeable future, despite recent commitments from the Government to increase funding in the NHS and refurbishment of schools.
The FacilitiesManagement Outsourcing - Health & Education Market Report – UK 2018-2022 report is published by AMA Research, a leading provider of market research and consultancy services with over 25 years’ experience within the construction and home improvement markets. The report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.

Modular Floorcoverings Market - 5 Key Facts


  • Returning confidence in the private commercial sector and the continuing growth of LVT (luxury vinyl tile) has seen modular floorcoverings increase by 22% between 2012 and 2017.
  • Carpet tile is the dominant sector; however, pressures from competing modular floorcoverings have muted value growth over the last 2-3 years.
  • LVT continues to outperform the wider market but the sector is increasingly subject to increased competition levels and significant downward pressure on prices. 
  • Imports play a significant role for the market with carpet tile, LVT/vinyl tiles and ceramic/porcelain tiles having significant import penetration levels.
  • More modest annual growth rates of around 2-3% are currently forecast to 2021, reflecting the current uncertainties surrounding the Brexit process, increased competition and further pricing pressures.
These facts have been extracted from AMA Research's 'Modular Floorcoverings Market Report - UK 2017-2021 Analysis' available for purchase now. 

Thursday, February 15, 2018

7% overall growth forecast in the UK floor and wall tiles market until 2021


Subject as it is to the influences of consumer and business spending levels, construction output and underlying economic trends, the wall and floor tiles market delivered a strong performance between 2014 and 2017 with overall growth of 8%. However, growth rates have slowed to around 2% in 2016-17 with this more modest growth scenario likely to be a feature of the market into the medium-term. Key factors that have underpinned the market over the last 2 years have included strong demand from both contract and residential end-use sectors as well design and innovation trends that have added value to products.
The market has benefitted from returning confidence in the housing market in terms of both new housebuilding and RMI. The “improve not move” trend continues to positively influence the market with householders often trading up to higher value products particularly for floor tiles. Improving completions volumes for new housebuilding have provided opportunities for growth but the continuing trend for upstands and painted walls in kitchens for new houses has, to some extent, limited the potential growth for wall tiles. Non-domestic applications have continued to provide strong demand, including offices, entertainment & leisure, transport buildings, education and industrial.
Ceramic and porcelain tiles dominate the product mix, with natural stone accounting for around a fifth value share and the others sector accounting for the remainder. Consumer demand for durable, hardwearing and easy to maintain flooring has benefited the porcelain tiles sector in particular in recent years. A degree of polarisation is still evident at the lower end of the market where white & single coloured ceramic tiles remain popular, while in the mid-upper sectors of the market there is high demand for more decorative ceramic products as well as natural stone and stone and wood effect porcelain tiles.
Textures and design elements have become increasingly important within the market with continuing production and printing innovations allowing manufacturers to easily replicate the appearance of natural materials.  In addition, new technologies have meant that production turn-around times have been improved which has resulted in manufacturers being able to supply limited runs of higher value products aimed at the upper end of the market. Patterns and shapes remain a key element of the market with “random lay” decorative tiles for both walls and floors increasingly offered by suppliers.
The market is dominated by imports with penetration rate estimated at around 70% in 2017 with European producers dominating import supply. UK-based manufacturers are under increasing pressure and this is likely to continue as the Brexit process advances. This may result in further corporate activity such as restructuring and the moving of manufacturing bases.
“International trade is a key element of the market given the low number of UK based volume manufacturers but high levels of demand” said Jane Tarver of AMA Research.  “Sterling exchange rates are therefore likely to continue to have an impact on pricing into the medium-term as imports become more expensive. However, the ‘openness’ of the UK market to tile imports is unlikely to be reversed into the longer-term given the limited UK manufacturing base”.
Prospects for the floor and wall tile market into the medium-term remain relatively optimistic with the market forecast to grow to around by 7% between 2017 and 2021. Levels of residential RMI are forecast to increase to 2021, despite the economic uncertainty, and the trend for ‘get someone in’ - rather than DIY - is expected to continue benefiting the market.
The outlook for the non-residential construction sector is for only marginal improvement to 2018, followed by annual growth rates of 2-3% to 2021. In part, this reflects the uncertainty regarding the UK’s position post-Brexit, the reduction in business confidence and investment that are likely to affect some key sub-sectors for tiles, such as office construction.
Going forward, the floor and walls tiles market is likely to continue seeing significant competition from other surfacing materials, such as waterproof panels, including thin porcelain panels, LVT and other types of wall and floor coverings as well as the use of prefabricated bathrooms/wet room pods used in the contract sector.
The Floor andWall Tiles Market Report – UK 2017-2021 Analysis report is published by AMA Research, a leading provider of market research and consultancy services with over 25 years’ experience within the construction and home improvement markets. The report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.

Wednesday, February 14, 2018

3% growth in the UK Door and Window Fittings Market in 2017


The UK market for door and window fittings grew by around 3% in 2017. This is lower than in 2016, in line with slowing growth rates for the construction market as a whole and stimulated by greater demand for higher specification products. The door and window fittings market is closely linked to the fabrication and installation markets as well as the overall glazing industry, which is relatively mature but has seen steady growth in recent years.

Polarisation is a feature of this market and this is characterised at one end by high value, high specification products and low cost, basic product ranges at the other end – with the lower value sectors of the market experiencing significant downward pressure on average prices due to increasing import penetration.

There has been little change to the product mix for door and window fittings in recent years. Locks and handles represent the two major product sectors, together accounting for over half of the fittings market, although mechanical locks have lost some share as electronic locks have become more widespread. Door closers now account for an estimated 15%, having shown stronger than average growth.

Product development tends to be influenced by a number of factors including fashion, legislation and technical issues. Higher security standards play a significant role in product development and improvement, and there is some evidence of growing demand for automation in doors and windows which may drive development in the market going forward. Standard white hardware is declining in popularity, with finishes such as brushed chrome, brass, burnished bronze and nickel becoming more popular in the domestic sector.

In terms of supply, the UK door and window fittings market has seen a slowing of merger and acquisition activity in the last two years, following significant consolidation of suppliers in previous years, although the industry remains highly fragmented. Due to the wide range of options, styles and applications, many companies operate in just one or a few of the product sectors within this market. Imports also continue to play a significant role in the UK door and window fittings market.

“For 2018 and beyond, forecasts indicate marginal but positive growth, based on improving housing and construction markets - although growth will be constrained by price pressure and strong competition” said Fiona Watts of AMA Research.
Key drivers for growth are likely to be the trend to trade up to higher specification products, particularly those which offer added security features and are aimed at the commercial sector. Another major main driver for growth will be improving output levels in the private commercial construction sector and continued growth in the housing market.

The Door andWindow Fittings Market Report – UK 2018-2022 report is published by AMA Research, a leading provider of market research and consultancy services with over 25 years’ experience within the construction and home improvement markets. The report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.

Tuesday, February 13, 2018

Roofing Market - 5 Key Facts

  • The roof coverings market is estimated to be worth over £1.3bn at manufacturers' selling prices (MSP).
  • Overall, the roofing market increased by 7% in 2016, though growth in 2017 has been lower.
  • The largest product sectors are metal roofing systems and concrete roof tiles, which accounted for respectively 29% and 21% of the total market by value in 2016.
  • In terms of distribution, the leading channel is roofing merchants and specialist distributors with a share of 50-55%, though this varies by product type.
  • Forecasts for the UK roofing market are modest with growth of just 2% expected over the next 4 years.
These facts have been extracted from AMA Research's 'Roofing Market Report - UK 2017-2021 Analysis' available for purchase now. 

Residential RMI to underpin growth in the UK Paint, Wallcoverings and Woodcare market


The market for paint, wallcoverings and woodcare products was worth an estimated £925m in 2017. An upturn in the construction sector in 2014 stimulated demand for paint and wallcoverings and the market continued to grow to 2015, underpinned by positive developments in the domestic sector. However, the market has been relatively flat since 2016. Key drivers of demand are the housing market, consumer confidence, home improvement levels, design trends, non-residential construction activity and the weather in any given year.
The paint and effects sector has grown by an estimated 8% from its low point in 2009, although has been relatively flat in recent years. Within this sector there has been a continued shift towards more water based paints, with acrylic eggshell, for example, representing a growth area. There has also been an increase in demand for value added products such as durable, stain resistant and easy-to-clean products, as well as more specialist paints, including light reflecting, textured finishes, anti-bacterial, low odour, fast drying, anti-slip floor paint and insulating paint.
In the wallcoverings sector, consumers appear to be increasingly confident in using bold designs. Larger designs with increased use of texture and digital prints are also popular - digital printing has enabled some revolutionary changes, with the availability of unlimited colour palettes and no restrictions on pattern size.
The woodcare product sector has experienced growth, benefiting from a range of factors including the impact of climate conditions & the weather, growth in key sectors such as fences, sheds, furniture & conservatories, increasing popularity of garden paint and the growing housing sector.
The DIY multiples channel accounts for the largest share of the market, with large ranges of branded and un-branded/own brand products available in the majority of outlets. However, trade centres have gained share benefiting from the growing trend to outsource decorating work to tradesmen, and the direct channel has benefited from growth in the non-domestic sector. Distribution routes are likely to be impacted by the structural changes currently occurring in the retail sector, with many distributors offering multi or omni-channel services, as well as the predicted growth in the ‘click and collect’ segment.
In terms of supply, the market is relatively concentrated and dominated by a small number of larger organisations. Imports remain a feature of the market, with the EU accounting for the majority share of imports, although the UK is a net exporter of paints.
Keith Taylor, Director of AMA Research commented:
“Market prospects in the paint and wallcoverings market remain positive, although only modest growth levels of 1-2% per year are forecast to 2022. Levels of residential RMI are forecast to increase, despite the economic uncertainty - not only are people improving their home instead of moving, but the trend to carry out improvements prior to placing properties on the market appears to be returning. The trend to ‘get someone in’ instead of doing it yourself is also expected to continue benefiting the market.”
The Paint,Wallcoverings & Woodcare Market Report – UK 2018-2022 report is published by AMA Research, a leading provider of market research and consultancy services with over 25 years’ experience within the construction and home improvement markets. The report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.

Wednesday, January 31, 2018

Transport set to dominate output within the UK infrastructure sub-sector into the next decade

In 2017, contractors’ output in the transport sector was valued at around £8.6bn. Major transport infrastructure development programmes are largely driven by public sector funding under 5-year investment programmes, with funding allocated on an annual basis. Between 2012 and 2016, contractors’ output in the transport infrastructure sector had been volatile, due to annual fluctuations in new road construction output and year-on-year decreases in rail construction activity levels.
Roads construction and maintenance is mainly being driven by the first phase of the Highways Agency’s 5-year Roads Investment Strategy (RIS1), which is part of the National Infrastructure Plan (NIP). Under this, over £15bn of funding has been allocated for capital enhancement and renewals for the period 2015-16 to 2020-21. Other major road schemes are being delivered as part of the multi-modal Transport Strategy for the North, which sets out the strategic options for future transport investment in the north of England to boost the Government’s concept of a “Northern Powerhouse”.
As a result of these and other ongoing schemes, roads construction output is forecast to increase in 2018 and 2019 as road improvement contracts under Highways England’s Collaborative Delivery Framework (CDF) translate into increased output. In addition to new works and major upgrade programmes, Highways England also has a maintenance budget of £1.3bn over its first fixed 5-year investment period for to 2019-20.
In the rail sector, there have been significant increases in contractors output and new orders, underpinned by a combination of major projects and regional frameworks. Contractors working in the UK rail sector currently have £38bn funds available for Network Rail for Control Period 5, covering the period between 2014 and 2019.
Rail construction output is expected to grow significantly during the period 2017-2019, underpinned by a substantial number of major schemes. These include the Bank Station redevelopment project, main tunnelling works on the Northern Line extension to Battersea and electrification of certain cross-country routes, the delayed Metropolitan Line extension project and enabling works on Phase 1 of the HS2 Project.
In the airports sector, proposed additional runway capacity at Heathrow should underpin future development, though major construction works are not likely to begin until 2021. Output in the airports sector is also expected to be boosted by a 4-year development programme at Manchester Airport and a £1.2bn capital investment programme over the next 5 years at Gatwick Airport.
Furthermore, announcements of additional capacity and investment at the UK’s major airports, together with a number of smaller and medium sized projects at both major and regional airports should also generate additional work in the sector over the next few years.
In the UK ports sector, a number of major schemes are currently being planned or are progressing, many of which are part of key major regeneration schemes including: a significant expansion at the Port of Tilbury; the Western Docks Revival (DWDR) project at the Port of Dover; the second phase of Peel Ports Group Liverpool2 terminal expansion programme; and a major expansion of Southampton Docks.
In Scotland, Wales and Northern Ireland each devolved administration produces its own infrastructure plan setting out spending on economic infrastructure. The Scottish investment pipeline includes 30 major programmes and over 100 individual projects. In Wales, around £2bn is being invested in transport infrastructure projects, while in Northern Ireland, £2.6bn is being invested, with the majority being spent on roads.
The outlook for transport infrastructure construction is positive, with the Government recently committing to providing the biggest investment in transport infrastructure in years, and as a result. Forecasts indicate increasing output and a significant pipeline of major projects under the National Infrastructure and Government Construction Pipeline (NIP). As part of the NIP, around £92bn is to be invested in transport infrastructure over the period to 2020-21, of which more than half will be put into railways projects. A further £40bn will be invested across the infrastructure sector at large after 2021.

The TransportInfrastructure Construction and RMI Market Report - UK 2017-2021 Analysis report is published by AMA Research, a leading provider of market research and consultancy services with over 25 years’ experience within the construction and home improvement markets. The report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.

Friday, January 26, 2018

UK Highway Maintenance market worth more than £10bn in 2017

The UK highways maintenance market is valued at more than £10bn, and makes up a major part of UK infrastructure spending. Expenditure by Highways England accounts for around a third of the market, while expenditure by Local Authorities in England on highways and transport in 2016/17 was approximately £4.4 billion. Structural maintenance accounts for a significant proportion of capital expenditure on roads by local authorities.
The Government has committed to major spending and investment programmes in the road network, driven by factors such as increased road congestion, rising population levels and deterioration of roads by adverse winter weather. Subsequently, the roads sector has been one of the market’s fastest growing in terms of expenditure in recent years. Major target areas include manufacture and application of bitumen macadam, and asphalt and bitumen emulsion, manufacture and application of surface dressing, aggregates for macadam and surface dressing, special surface solutions, road markings, reinstatement products, road studs and winter maintenance treatments.
Funding for Highways England is determined every five years via a Road Investment Strategy (RIS) set down by the Department for Transport. Through RIS 1, it aims to invest around £15bn in England’s road network over the 2015-2020 period, covering over 100 major schemes. In addition, the Pothole Action Fund is worth around £250m at present.
Within the last financial year, the Scottish Government budgeted more than £820m for expenditure on the country’s motorways and trunk roads, an increase of more than 18% compared to the previous year, while the Welsh Government’s 2016/2017 budget spent almost £52m on motorway and trunk road operations, with an additional £108.7m allocated for improvement and maintenance activities.
Private sector involvement in highways maintenance has steadily increased with around 50% of UK authorities now thought to use term maintenance contracts, many of which are 5-10 years in length, with some even longer. There has been an increase in major contractor involvement in this market with companies such as Kier, Amey, Tarmac, LafargeHolcim and Balfour Beatty taking many of the largest highways maintenance contracts. There have also been several mergers and acquisitions in the sector, and it is anticipated that other traditional construction companies will enter this market in future.
Going forward, investment in road construction and maintenance is projected to increase over the short to medium term, unless the UK economy suffers a major contraction. The Government also continues to explore ways of bringing more private capital into road building.
There are likely to be changes in the way certain highways are maintained. The next decade or so is likely to witness greater impact of technological advancements and ‘smart’ systems, as well as more consideration given to the environmental impact of highways maintenance projects. Changes in the way maintenance contracts are introduced are also expected.
“Environmental and sustainability considerations are likely to play a greater role in future highways management and some of the products which now feature in road and highways maintenance have been created with these criteria in mind” said Hayley Thornley, Research Manager at AMA Research. “Examples include photovoltaic road surfacing and solar-powered road studs, greater use of natural and recycled materials and/or aggregates and micro-foamed asphalt which lowers carbon dioxide emissions.”
The UK road network of the future is likely to include more smart motorways, and currently 10 smart motorways are planned for construction. Demand is also likely to continue rising for products which can help to reduce the time spent on site and therefore minimise disruption to road users.
The HighwayMaintenance Market Report – UK 2017-2021 Analysis report is published by AMA Research, a leading provider of market research and consultancy services with over 25 years’ experience within the construction and home improvement markets. The report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.


Monday, January 22, 2018

Commercial Office Construction Market - 5 Key Facts

  • Output has been buoyant, rising to reach £11.9bn in 2016. 
  • Office construction represents 18% of total non-residential construction output.
  • The private sector accounted for almost 94% of output in 2016.
  • AMA estimates that pre-fabricated volumetric buildings for the commercial office sector is estimated at around £35-40m, or around 4-5% of the total prefabricated buildings market.
  • The Central London tall buildings pipeline continues to grow, with over 437 tall buildings in the development pipeline.   
These facts have been extracted from AMA Research's 'Commercial Office Construction Market Report - UK 2017-2021 Analysis' available for purchase now. 

UK bathroom market to grow by 12% over the next four years

The UK market for bathroom products achieved value growth of around 3% in 2017. The pace of growth has lessened over the last 12 months compared to the previous 2-3 years, with modest growth expected in 2018 and 2019. The main factors influencing the market include lower levels of consumer and business confidence, in turn impacting on demand for bathroom products. Overall market growth between 2017 and 2021 is forecast at around 12%.

Baths and sanitaryware is the largest sector of the bathroom products market, followed by bathroom accessories, taps and mixers, bathroom furniture and whirlpool/spa systems. In terms of trends, demand for quality bathroom products with additional features is expected to remain significant, and will be supported by a greater level of replacement purchases as consumers upgrade to higher value solutions, with aesthetics continuing to exert a notable influence on consumer choice.
The growing consumer preference for minimalist, wall-hung and counter top designs will impact volume demand for sanitaryware. This trend will support the growth of prefabricated solutions, installation frames and concealed plastic cisterns. Taps and mixers will increasingly be used as a means of differentiation in domestic and certain commercial environments, with higher quality finishes and contemporary styling.
Popular products include space saving solutions such as wall-hung sanitaryware, slim-line wash basins and short-projection furniture. While in the baths sector, compact shower baths, small freestanding baths and space-saving ‘back-to-wall’ D shaped/skirted baths, continue to gain share.
In the bathroom furniture sector there is increasing demand for clever ‘invisible’ storage solutions that ensure that the bathroom remains tidy and clutter free. The market for bathroom accessories is likely to remain positive as consumers buy accessories as an easy and cost-effective way to update and personalise their bathroom.
Going forward, new housebuilding volumes are set to stabilise despite the economic uncertainty. Prospects remain positive in this sector and will support demand for bathroom products installed in new build homes, while RMI activity is expected to be more constrained in the next 2-3 years. Commercial private work will also remain a key driver of activity across a number of applications, including hotels and leisure.
 “The wide variation in UK bathroom size will continue to provide opportunities for product development to suit the various types of bathrooms such as ensuite, cloakroom installations etc.” said Hayley Thornley, Research Manager at AMA Research.
 Modern, digital and advanced technology, such as digital taps and sensors to control temperature and flow, motion sensor LED mirrors and Bluetooth entertainment systems, will become more widely used in the bathroom as consumers and businesses become increasingly aware of their benefits. Consumers are demanding quality products that will last and use the internet to search for the best deals available.”
There will also continue to be a significant demand for inclusive bathroom products that are both practical and easy to use, such as low-level or walk-in baths for easy access, wall-hung sanitaryware for easier manoeuvrability, thermostatic and lever operated tapware controls, and shower toilets. This will be boosted by the Disabled Facility Grant (DFG) provision to pay for improvements such as accessible showering facilities, which is set to double over the next 2-3 years to over £500 million in 2019/20.

The Bathroom MarketReport – UK 2017-2021 Analysis report is published by AMA Research, a leading provider of market research and consultancy services with over 25 years’ experience within the construction and home improvement markets. The report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.