Thursday, September 29, 2016

Data Centre Construction - UK 2016-2020 - Key Facts

  • The market for data centre construction is estimated to be valued at around £1bn in 2015 with data sovereignty issues underpinning the market.
  • Connectivity providers, such as carriers, mobile operators and ISPs account for the largest sub-sector within the co-location providers accounting for 35% of this sector.
  • An estimated 80% of all data centre space is accounted for by owner occupiers.
  • It is estimated that new build work accounts for a 34% share of the market by value, down from 2013, reflecting high levels of new build at that time.
  • In terms of the estimated cost breakdown for the build of an average data centre, materials account for the largest share at 56%. 

These facts have been extracted from AMA Research's report 'Data Centre Construction Market Report - UK 2016-2020 Analysis', available from www.amaresearch.co.uk or by calling 01242 235724.



Tuesday, September 27, 2016

Building Boards - UK 2016-2020 - Key Facts

  • The UK building boards market is worth around £1 billion. 
  • Polymer boards are the largest sector, with ‘specialist boards’ growing and account for over 10% of the market.
  • PIR insulation boards are the largest sector in the rigid polymer boards market, but XPS accounts for an annual 20% share.
  • The market for specialist boards is worth over £100m, with calcium silicate boards one of the leading sectors.
  • Building Merchants and Specialist Distributors are the leading distribution channels.

These facts have been extracted from AMA Research's report 'Building Boards Market Report - UK 2016-2020 Analysis', available from www.amaresearch.co.uk or by calling 01242 235724.

Friday, September 23, 2016

Small & Medium Renewable Energy - UK 2016-2020 - Key Facts


  • Solar photovoltaics (PV) accounts for over 80% of all renewable electricity under the FIT scheme.
  • By installed value, heat pumps account for some 7% of the market in 2016.
  • Only 9% of the small-medium onshore windpower sector is residential in 2016.
  • Solar thermal installations continue to fall, dropping to c 25,000 m2 in 2015.
  • Small biomass boilers (<200kw) accounted for 69% of all biomass boiler installations in 2015.

These facts have been extracted from AMA Research's report 'Small & Medium Renewable Energy Market Report - UK 2016-2020 Analysis', available from www.amaresearch.co.uk or by calling 01242 235724.

Thursday, September 22, 2016

12% increase in the market for kitchen and bathroom products in new housebuilding in 2015

New housebuilding is an important end use sector for kitchen and bathroom products, and in 2015 it was estimated to account for approximately 13% of the overall UK kitchen and bathroom products market. The market for kitchen and bathroom products in newbuild housing increased by an estimated 12% in 2015 to reach a value in excess of £700m, reflecting the continued steady improvement in the UK economy, consumer confidence levels and significant growth in the housebuilding market.
Kitchen appliances accounted for the largest sector of kitchen and bathroom products in the housebuilders market with 40% share by value. Other key product sectors reviewed in AMA Research’s report include kitchen furniture, worktops, sinks and tapware, bathroom products and shower products.
Following a static period between 2011 and 2013, market conditions have steadily improved in 2014 and 2015 with housebuilding levels showing good growth, supporting new build kitchen sales via contractors, developers, distributors and merchants. The shift towards three and four bedroom homes has supported larger new build kitchens and additional utility room installations in the new build sector. Most housebuilders offer homebuyers the option to customise their new kitchen and use predefined ranges of products such as worktops, splashbacks, furniture, tiles, lighting and appliances.
Key trends in new build kitchens include; a focus on layout and design, growing popularity of kitchen-diners with a seating area, growing demand for ‘hotel-style’ quality interiors, increasing focus on durability, particularly in the social housing sector, increasing usage of well-known reputable brands of kitchen appliances in order to attract buyers and an increasing choice of worktop materials and designs, with built-in or integrated appliances installed in the majority of new build homes. Kitchen taps have become more advanced with added value options including pull-out hoses for food preparation, integral water filters and the hot water boiling tap.
Trends worth noting in the new build bathroom sector include; a continued trend towards 2+ bathrooms / ensuites, increasing investment in quality fixtures and fittings offering longevity and luxury, minimalist designs, ‘future proofing’ of bathrooms so they can be easily adapted to changing needs driven by an ageing UK population, increasing popularity of wetroom areas, and higher usage of digital technology in the premium sector in applications such as digital shower controls, spa baths, sensor operated mixer taps etc. Despite the general trend towards showering, a bath continues to be an essential feature in the main bathroom in the vast majority of new build homes.
With a growing proportion of flats and apartments expected in the longer term and the small size of the average UK bathroom and kitchen, there will be a continuing demand for space-saving solutions, such as wall-hung sanitaryware, clever kitchen storage, slim-line appliances and compact bathroom furniture. Housebuilders are continuing to focus on family homes, which should drive sales of larger, higher value kitchens. Increased choice is likely to become more important as housebuilders compete to attract homebuyers, with branded ‘connected’ appliances, solid surface or stone worktops, digital showers, freestanding baths, wetroom areas etc. being increasingly offered.
Keith Taylor, Director of AMA Research said “The new housing sector continued to recover until mid-2016, underpinned by mortgage assistance schemes such as Help to Buy, a more buoyant economy and undersupply for a number of years, however, the referendum decision to leave the EU has resulted in some economic uncertainty and housebuilders are likely to remain cautious. Consequently, this may result in a lower level of housing starts in 2017, which will affect volume sales of bathroom and kitchen products into the new housing sector.”
Although Brexit may have a negative effect on the construction industry and a decline is likely in some sectors including housing - particularly in volume terms – underlying demand and the possibility of higher costs for imported raw materials and products, may support value growth in the housebuilding as well as the kitchen and bathroom sectors. The value of kitchen and bathroom products in the housebuilding market is forecast to grow by around 4% between 2016-2020.

The ‘Kitchen and Bathroom Products in the Housebuilding Market Report – UK 2016-2020 Analysis’ report is published by AMA Research, a leading provider of market research and consultancy services 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, September 21, 2016

Garden Buildings and Structures - UK 2016-2020 - Key Facts

  • The Domestic ‘Garden Buildings and Structures’ market is worth around £300 million in 2016.
  • Garden storage accounts for over 30% of the market, but buildings ‘for all use’, log cabins and summerhouses account for around 45% share.
  • Modular garden rooms are valued at around £40 million.
  • The top 3 suppliers account for a combined share of 20-25% of the market.
  • DIY multiples account for around 40% of log cabins/ summerhouse sales, but Direct Supply accounts for over 50% of larger garden buildings.

These facts have been extracted from AMA Research's report 'Domestic Garden Buildings and Structures Market Report - UK 2016-2020 Analysis', available from www.amaresearch.co.uk or by calling 01242 235724.

Tuesday, September 20, 2016

4% growth in the UK Home Improvement Multiples Market in 2015

The UK home improvement multiples market was worth around £7.2bn in value terms (RSP) in 2015, following an increase of around 4% in 2015. Overall market conditions have improved in recent years following a period of falling incomes, rising household expenses and employment insecurities, with sales in the home improvement multiples sector having increased steadily since 2012, a year when particularly poor weather had a marked impact on demand for products used outdoors.
The largest product category in the home improvement multiples sector is garden, domestic landscaping & leisure, which accounts for over 20% of total sales. Other major product groups include building supplies, lighting & electrical, tools, hardware & PPE and decorating products. Underpinning the market over the last few years has been a combination of factors; growth in the general economy, rising incomes, growth in online shopping, a strong housing market and much better summer weather in 2013 and 2014.
However, growth has largely been constrained by a shift away from householders doing DIY jobs towards using tradesmen. This has been most noticeable among the under 35s, where a general lack of skills / aptitude and a preference for spending money and time on other things has developed over the last few years. Also, the ongoing housing shortage and accompanying rises in house prices and mortgage deposits has made it harder for potential first time buyers to buy a home, forcing them to rent from private landlords.
Affluent, and often older, homeowners have also been generally more likely to use tradesmen to work on extensions, loft & basement conversions and garden landscaping. This influx of skilled workers from other EU countries has led to tradesmen offering highly competitive prices. However, there is widespread concern about skills shortages, and whether this situation will continue post the decision to leave the EU remains to be seen.
Tradesmen typically use trade suppliers such as builders’ merchants, trade counters and specialist distributors, and this trend to GSI (Get Someone In) has contributed towards some loss of share for the home improvement multiples in certain product markets, although some of the leading multiples are also significant trade suppliers.
“In response to increasing competition in the core product markets in recent years from general merchandise multiples, specialist online home improvement products retailers, grocery multiples, discount chains and catalogue stores, the traditional home improvement multiples have been implementing major changes, including undertaking store rationalisation programmes and introducing new formats” said Keith Taylor, Director of AMA Research. Other strategies have included expanding product lines into non-DIY offerings such as homewares, electronic security equipment, lighting and kitchens and bathrooms“.
Demographics changes, digital technology and developments in consumer behaviour have fundamentally changed the nature of home improvement retail in recent years, and companies will need to ensure they keep pace with consumer demands. In response to this, some retailers have invested extensively in online retail and 'click and collect' services. As consumer shopping habits evolve, home improvement retailing may become even more price-driven, with continued growth in own brand sales. Even though the general economy and consumer confidence have improved between 2012 and 2016, many consumers have not reverted to ‘trading up’, since becoming generally aware of the quality the less familiar brands stocked by retailers.
Following the EU referendum, there is considerable uncertainty as to how the UK economy will fare over the next few years, with many experts forecasting a recession in the building and construction industry. As with the market for building materials in general, it is expected there will be a marked impact on home improvement retailing, as householders cut back on spending on major projects. Banks may also be even more wary of lending money for significant home improvement projects, especially if lack of consumer confidence leads to a fall in house prices. Since many home improvement products are imported, a weak pound is likely to drive up prices of commodities from overseas and may impact on suppliers and retailers’ margins. As a result of this uncertainty, our forecasts indicate that growth rates will fall from 2016 onwards.

The ‘Home Improvement Multiples Market Report – UK 2016-2020 Analysis’ report is published by AMA Research, a leading provider of market research and consultancy services 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, September 16, 2016

23% growth over two years in the UK passive fire protection market

The UK market for passive fire protection products has seen good growth during the last two years, in line with increased construction output. According to a new report by AMA Research, strong value growth of 23% was achieved between 2013 and 2015, driven by higher levels of construction and RMI activity. Forecasts indicate a more subdued performance in the short term, with lower levels of construction activity anticipated following the decision to leave the EU.
The passive fire protection market is comprised of fire resistant doors, fittings and intumescent seals, cables, partitions and suspended ceilings, glass, structural protection and ductwork and damper systems. This market is highly dependent on new construction activity, particularly in the key end use sectors of offices, education, healthcare and industrial, with product development and regulatory changes also key factors contributing to value growth in recent years.
Fire resistant doors, fittings and seals represents the largest sector of the market, accounting for around 60% of total market value. Product development is an important driver, and recent innovations include intumescent coatings with shortened drying times; electronic fire door closers that are linked to fire alarm systems; and more flexible fire stopping pipe collars that allow a greater range of applications compared to conventional collars.
Within the passive fire protection market, there are a number of vertically integrated manufacturers-installers operating across the fire and security sector. In addition, there are a number of manufacturers operating in a specific sector, e.g. suspended ceilings, offering fire resistance within their product range, while others are specialist manufacturers of passive fire protection products. Other key suppliers are large multi-national corporations with interests across a broad range of sectors and products.
Distribution channels and routes to market vary depending on the type of fire protection product. Some manufacturers also install their own products, and specialist installers play a significant role, as specific fire-related expertise is often required to ensure passive fire protection will perform as expected in the event of a fire.
Keith Taylor, Director of AMA Research said: “Underlying prospects for the fire protection market remain positive, though the short term growth is brought into question by the recent referendum and the likely resulting shock to the economy. That said, the medium term forecasts are stable and growth in the market is anticipated at around 1-3% per annum until 2020.”
New office construction, a key market for fire protection products, is forecast to experience a moderate fall in the short term with delays in investment and expansion expected following the Brexit decision. This may impact on demand in a number of product sectors in the passive fire protection market including structural, suspended ceilings and partitions.
Education is also a major sector for fire protection products such as structural, ceilings, doors and cabling. Public sector investment is the key driver for this sector, and the most recent Government Spending Review forecasts that the level of investment in new school building will increase significantly over the next few years. Capital building programmes in the higher education sector might also provide impetus to the market in the short to medium term.

The ‘Passive Fire Protection Market Report – UK 2016-2020 Analysis’ report is published by AMA Research, a leading provider of market research and consultancy services 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, September 12, 2016

Uncertain outlook for UK housebuilding following EU referendum

The UK housebuilding market remains buoyant and was boosted in 2015 by improving mortgage availability, high consumer confidence and a number of government schemes for first-time buyers. Annual housing starts have experienced good growth since 2013 rising by 6% in 2015, and housing completions grew by 19% in 2015. While a number of factors will provide underlying support in the medium to longer term, prospects for output growth in the residential sector are likely to be affected by the decision to leave the EU. 

Private sector housing completions in the UK increased by 17% in 2015. These increases have been driven by demographic changes, a higher demand for family homes, competitive mortgage deals and an upsurge in the wider UK economy, with demand also driven by government policies, including Help to Buy. Recent announcements include an extension of Help to Buy until 2021, as well as the launch of a Help to Buy ISA to top up first-time buyers' savings for a deposit.


Average house prices have risen by around 45% since 2005, while average prices for new dwellings have risen by around 30% in the same time period. The situation in the social housing sector is less positive, with variable completion levels in recent years falling well below Government targets. However, in the medium to longer term, the social housing sector should be supported by a number of Government initiatives to boost levels of affordable and social housing – presuming these initiatives will go ahead following the referendum decision. The impact of a reduction in revenue streams for housing associations and local authorities and cuts to social rents in 2016 is likely to be tempered by affordable housing programmes.


The number of larger housebuilders, building over 500 units a year, has remained more or less stable in 2015. The volume builders have experienced healthy levels of recovery over the last 18 months - 2 years and there has been a substantial turn in the market back towards larger builders. However, smaller builders continue to struggle to secure funding and this is restricting the scale of projects undertaken. Small and medium-sized builders were worst affected by the downturn and are still finding many barriers to developing new homes. 


The impact of the recession has led to a highly concentrated housebuilding market in the UK with the vast majority of all private sector output now being produced by the largest housebuilders. Joint ventures between construction groups and commercial developers had been a major trend in the housebuilding sector for a number of years, partly due to the Government’s drive to see more mixed-use developments and urban regeneration.


In 2015, the Government set ambitious targets in an attempt to tackle the housing crisis and get more new homes built over the course of the current parliament, including to deliver 1m new homes by 2020, of which 400,000 will be affordable homes. These commitments will be principally delivered through planning reforms to release more publicly-owned land for starter homes and require a proportion of starter homes to be developed as part of section 106 affordable housing contributions. In January 2016, the Government also announced a £1.2bn fund to build 30,000 affordable ‘starter homes’ on underused brownfield land in the next 5 years. 


However, despite these reforms current rates of housebuilding are still way below government targets and the level needed to meet existing and anticipated demand for new homes. This consistent and chronic undersupply of house building, combined with government policies in recent years has led to consistent increases in house prices and a fall in affordability, especially in key areas of demand. 


The impact of the decision to leave the EU is likely to vary on a regional scale with investment in upmarket London developments more severely affected due to the high level of overseas investors in recent years” said Keith Taylor, Director of AMA Research. “Lower levels of investment and economic uncertainty are likely to result in the housebuilders taking a more cautious approach in the short term, with a lower level of starts expected in 2017, and economic uncertainty is expected to continue while the Brexit package is negotiated.” 


The ‘Housebuilding Market Report – UK 2016-2020 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, September 09, 2016

Growth in UK bedroom furniture market despite intensifying competition

Following strong growth in the bedroom furniture market during 2014, the market grew by a modest 2% during 2015, with similar rate of growth forecast for 2016/17. Factors supporting market growth have included an improvement in the housing market, higher consumer confidence levels and a surge in imports in 2014, with China, Vietnam and Poland responsible for much of this increase. Bedroom furniture is estimated to account for a declining share of approximately 12% of the overall UK domestic furniture market.
A number of underlying factors are influencing sales of domestic bedroom furniture, including a greater number of smaller households, a continuing demand for new housing and a new generation of children and teenagers, who require more than just a bed and a cupboard, but a more complex arrangement of storage solutions to cope with their increasingly technological environment, incorporating laptops, televisions, DVD recorders, Xboxes etc. Storage remains a key issue for most UK householders, and the demand for practical storage solutions as well as modular and fitted products and sliding wardrobe systems, have also grown in recent years. In addition, there is an increasing focus on flexible and multi-functional furniture that can be used to maximise space.
In addition, the shift to the private rented sector will also be a factor influencing the nature of the buying population for bedroom furniture. The rental market has nearly doubled since 2002, and continued growth in this sector seems likely to increase the proportion of the buying population focused on lower cost products, particularly short to medium term tenants, and landlords. Factors that have had a negative impact on sales of bedroom furniture include an increase in home working, which can place pressure on bedroom living space within the dwelling, and price erosion. While the rapid penetration of low cost imports from the Far East and Eastern Europe has driven down prices and margins in most sectors of the furniture market, the import penetration level is at its highest in the bedroom sector.
Competition has intensified in the retail sector in particular, where the leading established players have seen grocery multiples gain share through the adoption of ‘click and collect’ business models, and online specialists becoming more significant. In terms of distribution share for bedroom furniture, retail specialists account for the bulk of the market, followed by furniture multiples and department stores/variety chains. Growing competition in a sluggish market has also been reflected in the continued high level of liquidations seen in the sector, both at manufacturer and retail level. In the fitted furniture sector of the market, however, many suppliers are vertically integrated companies, involved in the design, manufacture and installation of their own furniture, often marketed through their own retail outlets or via concessions in other stores.  
In overall terms, bedroom furniture remains a mature market, although future demand will be driven by a steadily increasing number of households and greater pressures on space utilisation and flexibility. Market conditions are likely to remain very competitive in 2016, but this should improve in the medium term, although they are unlikely to provide high levels of growth, as imports continue to drive down prices and margins.
“Most of the future growth within the bedroom furniture sector is expected to come from the fitted furniture sector and also the lower end of the market, driven by companies such as IKEA, Argos and Tesco focusing on affordability and innovation supported by a wide distribution network” said Keith Taylor, Director of AMA Research. “The market remains highly competitive and smaller independent retailers will continue to feel both economic pressures and a threat from national retailers”.
Prospects for the next 5 years are likely to remain mixed for the overall furniture industry, with forecasts showing modest volume growth in the shadow of an exit from the EU and the economic consequences thereof. The bedroom furniture market is also forecast to show some growth in the next few years, albeit at a slower rate than the overall furniture industry and is estimated at around 2-3% in value terms, per annum.

The ‘Domestic Bedroom Furniture Market Report – UK 2016-2020 Analysis’ report is published by AMA Research, a leading provider of market research and consultancy services 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, September 07, 2016

Modest forecasts for growth in the UK leisure construction sector

Construction activity in the leisure sector has been volatile in recent years, with a decline of around 5% in 2015. However, this followed strong growth in 2013 and 2014 and the sector remains a vibrant market for construction work, worth over £6 billion annually in new work alone. Expansion and investment has been largely driven by growing demand for budget hotels, health and fitness and, more recently the cinema segments.
However, in terms of revenue, the largest sector within the UK leisure industry is the ‘food service’ segment and the restaurant sector has experienced a strong performance over recent years. This has been driven by a growing trend towards consumers eating out more often – and this has helped drive expansion of new outlets to meet demand.
The UK hotel market has also continued to expand, with ‘budget’ hotels the key area of growth. Over 20% of hotel rooms in the UK are now estimated to be in the budget sector and most of the leading groups in the sector are continuing to expand their portfolios through substantial new development programmes. The UK health and fitness club market has also grown significantly over recent years, also driven by the budget segment, with market value increasing by around 3% in 2015. However, the private health and fitness market remains highly fragmented, though AMA’s report highlights the key development programmes of the leading groups in the sector.
Andrew Hartley, Director of AMA Research commented: “The outlook for entertainment & leisure construction output remains positive, if modest, with annual increases of around 2% currently forecast to 2020. However, in both the hotel and health club sectors, competition in the low cost segment has increased, but most of the leading operators have substantial development pipelines offering good potential for contractors and material suppliers.”
Going forward, there is a good pipeline of leisure sector work forecast to 2018, with a mix of theme park, resort, hotel and sports stadia in the pipeline, which should drive construction growth over the forecast period. However, the uncertainty following the outcome of the EU Referendum is likely to have some adverse effect on the leisure sector, including some cancelled or delayed projects, but it is too early to predict the impact of the Brexit process at this stage.
Opportunities for construction, fit-out and refurbishment work are mixed across the sector with significant expansion plans announced by budget hotels, ‘food-led’ pubs, budget gyms and cinema sectors, contrasting with continued pressure on the mid-market hotels sector and the betting and gaming industry. However, many new construction projects in the leisure sector relate to re-fit or refurbishment as hoteliers and leisure facility owners invest in their portfolios in order to maximize growth in occupancy and maintain market share, through a mix of refurbishment, upgrading facilities, and re-branding programmes, particularly for the larger leisure operators.

The ‘Construction in the Hotel, Entertainment and Leisure Sector Report - UK 2016-2020 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.