UK market for building insulation has recovered somewhat
in 2014 as housebuilding levels have continued to rise and initiatives such as the
Green Deal and ECO have gained some momentum. This followed a significant
downturn in 2013, which was due to a fall in government-subsidised retrofitted
installation activity, and saw the total market value fall by around 7%.
Although there has been growth in demand for insulation
products from increasing levels of new housebuilding and in non-domestic
building, the Green Deal and Energy Company Obligation (ECO) have so far only
generated a fraction of the levels of domestic installation activity of
previous government initiatives such as CERT and CESP, which ended in 2012. Other
key market influences include changes to Building Regulations and energy prices
changes. Although crude oil and gas prices have fallen recently, energy prices
are forecast to rise over the longer-term, which is likely to result in higher
end-product prices for insulation products.
PUR / PIR products now have the largest market share of
insulation products, accounting for ~40% by value in 2014. The market value of
mineral wool products has fallen due to the fall in demand for such products
under the Green Deal and ECO, but they still account for a third of the total
market in the UK. With retrofit the most important
market, the key areas of demand by application have been cavity walls and lofts.
The share held by solid walls was just 10%, although this is around 10 times
higher than under CERT/CESP.
By end-use sector, despite the dramatic fall in demand
under the Green Deal and ECO, the most important market remains domestic retrofit,
which accounts for ~40% by area installed and the key areas of demand by
application have been cavity walls and lofts. The non-domestic market is also
significant and mainly consists of insulation for flat roofs and site-built metal
cladding and roofing systems. The share for new housebuilding is higher than in
recent years due to steadily rising numbers of housing completions.
The key supply route for insulation products are the
specialist (interiors) distributors. Builders’ merchants account for approximately
15% of the market, the remainder being split between direct sales to
installers, direct sales to external wall insulation systems companies,
converters and DIY stores. The
installation market is polarised between a small number of national companies
and many regional and local independent firms. The leading contractors
typically provide other energy efficiency services as well as insulation work.
“Although the
non-residential and new house building sectors are forecast to continue to show
reasonable growth over the next five years, we expect retrofit installations in
the residential sector to lag behind in terms of growth” said Keith Taylor,
Director of AMA Research. “Growth in this
sector has been driven by Government funded initiatives in recent years to
subsidise the retrofitting of insulation, but due to the end of Green Deal
funding and also the uncertainty over the longer-term future of the ECO, this
suggests that growth in this sector may be more modest.”
The market for insulation products is forecast to grow by
6% in 2015, after which growth will gradually slow down to reach a level of
around 3% per annum in 2019.
The ‘Building Insulation Products Market Report – UK 2015-2019 Analysis’
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.
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