Construction in the Sports Sector - 5 Key Facts

• Annual construction output within the leisure and entertainment sector is around £6 billion, of which the sports sector accounts for an estimated 25%.
• It is estimated that the UK sports construction market was worth around £1.5 billion in 2017.
• Schools, colleges and higher education institutions for around 30% of total output within the sports construction market.
• Football stadiums and facilities accounted for 38% of UK professional sports facilities construction in the period of 2011-2017.
• The eight national contractors with the largest shares account for just around a third of the market.

These facts have been extracted from AMA Research's 'Construction in the Sports Sector Report - UK 2017-2021 Analysis' available for purchase now. 

12% growth predicted in the UK domestic garden buildings market between 2018 and 2022

The UK market for domestic garden buildings and structures has seen slow but steady growth in recent years. The overall sector is mature and highly dependent on replacement purchases as well as consumer confidence levels. Improving consumer confidence and spending in 2014 and 2015 stimulated demand for all product groups resulting in annual growth rates of around 3% per year, but whilst growth has continued since, more modest rates have been achieved more recently and the market increased by only 1% in 2017, in value terms.

Within the domestic garden buildings market, there are sectors that are mature and established, such as sheds and greenhouses, but also sectors that are less mature, such as garden rooms. Household ownership of ‘buildings for all year-round use’ is very low. These types of buildings are used for a variety of purposes such homeworking, leisure activities and accommodation, something which has helped to increase demand for higher specification buildings, boosting market value.

As is the case with most garden related products, the weather impacts directly on market performance, although some sectors are more vulnerable to fluctuations in the weather than others. Summerhouse sales, for example, are very seasonal, while log cabins and garden rooms are less so. In some cases, poor weather conditions can also temporarily boost sales. Stormy weather can cause damage to buildings and structures, and has the potential to stimulate demand for replacement products and, in some cases, more robust alternatives.

Within the overall domestic garden buildings market, there have been significant differences in performance between sub-sectors. Sheds and garden storage, the largest sub-sector, accounts for around one third of the market and remains a stable sector. Growth has been particularly strong for metal and plastic sheds & storage, in part be due to the increasing cost of timber.

While demand for log cabins has fallen in volume terms, the sector has benefited from a degree of upgrading and price increases. The summerhouses sector has been static and is experiencing increased competition from other product sectors, such as garden structures. Garden buildings for all year use represent a similar but slightly smaller share than log cabins and summerhouses. This sub-sector continues to see an increase in the cost of the average unit, due to an increase in specification and size of unit, improving market size.

Greenhouses and garden structures are the two smallest sub-sectors, with garden structures only representing around 3% of the overall market.

Key distribution channels for products such as summerhouses, sheds, greenhouses and garden structures at the lower end of the market, are the home improvement multiples and online/mail order companies. In contrast, higher value products, such as modular garden rooms and timber framed buildings, are generally sold direct to the customer, the majority with services such as installation included, although some are sold as self-assembly. An increasing number of manufacturers are also selling via their own websites.

Prospects for the overall garden buildings and structures market into the medium-term remain relatively optimistic with the market forecast to see steady growth rates of 2-3% per year until 2022. Consumer confidence and spending has started to show signs of deterioration and may impact on market development going forward, while other influencing factors include housebuilding & house moving levels, design trends, product specifications and product developments.

Fiona Watts, Editor at AMA Research, said “Mature sectors such as garden sheds and greenhouses are expected to remain highly dependent on replacement purchases, although there may be some latent demand from new gardeners that have not yet committed to these higher priced products. In contrast, lower ownership levels in sectors such as ‘buildings for year-round use’ may provide higher potential for sector growth, both in terms of first time buyers and current owners upgrading to higher specifications buildings.”

The ‘Domestic Garden Buildings and Structures Market Report - UK 2018-2022’ report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.

Floor and Wall Tiles Market - 5 Key Facts

• The floor and wall tiles market saw 10% growth between 2012 and 2016.
• The UK tiles market grew by a further 2% in 2017.
• Porcelain has continued to take share from other product sectors, most notably ceramic floor and wall tiles.
• Import penetration into the market is estimated at around 75% with only a limited number of UK based high volume manufacturers.
• Annual growth rates of 1-2% are currently forecast for the floor and wall tiles market to 2021.

These facts have been extracted from AMA Research's 'Floor and Wall Tiles Market Report – UK 2017-2021 Analysis' available for purchase now. 

44% increase in the UK lighting market between 2013-17

The overall lighting market in the UK was estimated to be worth £2.4 billion in 2017, having increased by 44% since 2013. The key driver for the lighting market is LED lighting which has gained significant share in the non-domestic sector and also started to make inroads into the domestic market. LED technology is likely to promote a period of innovation and expansion particularly in terms of more integrated products, control and lighting solutions. Forecasts are for growth but at a lower rate than in the period 2014-2017 as the uptake of LED’s has increased.

Retro-fitting of efficient lamp products has been crucial to growth rates within the market, and the lamps market has recorded the highest level of growth in recent years. It is expected to continue to outperform the market, due to the introduction of a wide range of replacement, higher value LED and low energy halogen products, although as the prices of these products fall considerably and penetration increases, this sector is expected to slow.

Luminaires dominate the UK lighting market, accounting for 57% share in 2017, although their overall share of the market is gradually declining in response to the high growth of other sectors. The luminaires market is more reliant on the levels of new build and refurbishment activity, particularly in the non-domestic sector. Strong luminaire market growth has been underpinned by investment in street lighting, rising levels of house completions as well as improvements in construction output for both the domestic and non-domestic sectors.

Controls also remain an important sector with high levels of growth and potential for this to continue. This reflects a sustained focus placed on efficiency and cost savings with organisations recognising the need to reduce unnecessary lighting provision. In the supply sector for controls, there has been a shift in focus towards lighting solutions and systems. This demonstrates not only the greater integration along the supply chain but also the significance of automation and control within the industry.

The UK lamps sector has been dominated by a small number of very large organisations who have all invested heavily in the LED sector in order to maintain market share through acquisition, vertical integration policies or organic and technical development. Opportunities are likely to remain within the UK lamps market for those organisations who can offer production scale and those who serve niche or specialist markets.

Home improvement multiples and department/high street stores are significant distribution channels for domestic luminaire sales with a wide range of refurbishment and decorating products under one roof. However, department stores and high street stores have lost market share recently and there has been significant share gain in the online retail sector.

Prospects for the UK lighting market remain positive, although more muted than recent history with annual growth rates of around 4-5% to 2022” said Fiona Watts at AMA Research. “There is potential for growth from the domestic sector as the take-up of LED systems offers increased scope for a reduction in energy-use, improved controls, and as technology prices fall and awareness of benefits increases.”

The adoption of more efficient lighting products which have boosted value underlying growth, have increased life cycle expectations which may have negative implications for the market into the longer-term. Despite the increased demand for LED technologies there has been an oversupply to the global market, especially from developing countries and China. As a result, the global prices of LEDs have fallen significantly and are likely to continue to decline to some extent as wider usage results in more competition.

The ‘Lighting and LED Market Report – UK 2018-2022’ report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.

Education Construction Market - 5 Key Facts

• Education construction output increased by around 8% in 2016 to reach a value of £11.2bn.
• Education construction output increased by around 8% in 2016 to reach a value of £11.2bn.
• A total of 537 schools across England are expected to be rebuilt or refurbished under the Priority Schools Building Programme by 2021.
• The overall grant distributed by HEFCE for the 2017-18 academic years is around £3.5bn, of which around £350m is capital funding.
• There are around 85,000 Purpose Built Student Accommodation bed-spaces in London.

These facts have been extracted from AMA Research's 'Education Construction Market Report – UK 2017-2021 Analysis' available for purchase now. 

Modest forecasts for construction output amid Brexit uncertainty

Recently revised data indicates that total construction output increased by 8% in 2017 compared with 2016, to reach a total value of £163.5bn. In terms of value, new work accounts for the largest share, with output growth having been particularly strong in the residential new work segment, which saw growth of 14% in the year. RMI output has also been stronger in the residential than in the non-residential sector. Overall RMI output increased by 7% in 2017.

In H1 2018, the construction sector remains uncertain to moderately optimistic. Indications are that new orders remained positive into Q4 2017 and this should lead to some growth in terms of output into 2018 and beyond for certain key sub-sectors, and as a result, the outlook for the UK construction market remains mildly positive into the medium-term, although with lower rates of overall growth than previously forecast.

The outlook for the housing sector remains positive, if modest, with 17% overall growth in residential output currently forecast between 2017 and 2022. The imbalance between demand and supply for new housing will remain one of the key drivers for continued output growth for the residential sector, and the number of new programmes designed to address shortage in housing stocks should motivate output into the medium-term.

However, predicted growth in the newbuild sector is set against lower growth levels for completions, and also takes into account an element of materials inflation – in particular for the finishing of new housing, such as sanitaryware, tiles and electrical wiring products. RMI in the residential sector is currently forecast to remain relatively steady, with low annual growth rates reflecting consumer confidence levels.

The non-residential sector is facing more subdued growth into the medium-term with output currently forecast to reduce to 1-2% 2018-19, followed by annual growth of around 3% to 2022. The issue of business confidence and investment levels and the “wait and see” approach regarding the commitment to future funding and capital commitments are all likely to act as a brake on output levels into the medium-term. 

Infrastructure will remain the largest sub-sector with growth underpinned by HS2 which has the potential to deliver £3-4bn pa of output to 2022. However, the HS2 works also bring into question the issue of capacities both in terms of materials but also workforce which could result in skills shortages for other sub-sectors into the medium-term.

The entertainment & leisure sector output is forecast to see good overall growth to 2022, when output is forecast to be around £10.9bn.  Following growth of around 33% in 2017, annual growth rates are currently forecast to fall back to around 3-5% from 2018 to 2022.

The retail sector is currently forecast to perform less well, due to a combination of structural changes within the sector and also potential reduction in consumer confidence and spending levels, and the public sector is likely to see less investment in capital projects into the medium-term, particularly given the focus on the collapse of Carillion and their extensive involvement in PFI contracts. 

“Overall growth in construction output is forecast to reduce to around 2% for 2017-18, but improving to 3% for 2019-22” said Jane Tarver of AMA Research. “This more modest forecast takes into account the continuing uncertainty surrounding the Brexit process affecting the timing of business investment decisions.”

The ‘Construction and Housing Forecast Bulletin - GB 2018-2022’ is published four times a year by AMA Research. The bulletin provides analysis of the overall construction market in current prices, in terms of new work and RMI activity, also public and private sectors and new orders, housing starts and completions, as well as forecasts to 2022. It is sold on a subscription basis and can be ordered online at www.amaresearch.co.uk.

UK interior refurbishment & fit-out sector increased by 6% in 2017

The interior fit-out and refurbishment market -as defined in AMA Research’s latest report on the sector - has increased by 34% since 2013, in value terms, and rose by 6% within the last year alone. However, annual growth levels are starting to slow, and more constrained growth is forecast, for reasons including the uncertain state of the UK economy, a deferral of major investment decisions, cuts to public sector budgets and a continued scaling back of large construction programmes.

Fit out and interior refurbishment output has increased steadily in recent years, especially within sectors such as commercial offices, education and leisure & entertainment. For a variety of reasons, many private sector clients have chosen to commission interior refurbishment works rather than costlier and potentially more disruptive new build projects. Ongoing shortages of Grade A office space in many parts of the UK have also contributed towards much of the recent market growth.

In the public sector, reductions in capital spending programmes and the trend towards smaller but more suitable estate portfolios has led to increased interest in refurbishment in industries such as education and healthcare. Organisations such as NHS trusts and universities have tended to reassess and refresh their existing assets, rather than taking on more expensive new build projects.

“In many end use sectors, demand for refurbishment services is also being led by changes in the way industries operate, such as a much greater emphasis upon technology-based learning in schools and universities, as well as rising expectations amongst students, which have led to significant improvements in many higher education institution facilities” said Fiona Watts of AMA Research. “Annual levels of growth of around 2-3% are forecast for the next few years.”

Commercial offices constitute the largest market for interior refurbishment and fit-out services, accounting for 27% of value in 2017. The shortage of Grade A office space has contributed to growth in retrofit refurbishment and remodelling of existing space, whilst considerations such as changing patterns of working and energy or sustainability concerns are also affecting ways in which offices are being designed.

Opportunities in the retail sector are expected to decline over the coming years. Store conversions and interior refurbishments remain important to many of the UK’s leading retailers, however many are now rationalising their estates in the face of greater competition from online shopping channels.

Others with a high-street presence such as pubs, restaurants and betting shops also face similar challenges, although overall the leisure and entertainment sector is forecast to grow, driven by clients such as budget hotel and gym/fitness club operators.

Education represents the second largest sector for interior refurbishment in the UK. In the higher education sector, there are significant opportunities for fit-out and refurbishment work going forward, and investment in areas such as student accommodation and learning and recreational facilities continues to grow, as establishments bid to stand out from their rivals to attract students. At the same time, the healthcare sector share is expected to remain unchanged for the next few years, although looking further ahead, the predicted expansion of the care homes sector may assume increasing significance within the healthcare market.

The ‘Interior Refurbishment and Fit-Out Market Report – UK 2018-2022’ report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.

Tough market conditions in the UK door & window fabricators market

The UK door and window fabricators market put in a strong performance between 2013 and 2016 but appears to have flattened out in 2017. The key defining factors that continue to pervade the market include; market maturity, fragmentation, competition, cost-management, building legislation, ‘green’ building, tough market conditions and diversification. Competition between suppliers remains intensive particularly given the current challenging economic environment. Growth prospects therefore remain modest with only marginal growth at best forecast in the short term.

The UK door and window fabricators market is driven by many factors, reflecting exposure to a number of markets, at times moving in different directions. These include private home improvement, public sector housing renovation, new housebuilding, commercial new build and refurbishment. Many door and window fabricators have responded to consumer market demand by broadening their range with alternative materials, styles and technical improvements to capture preferences which have included greater thermal and security features as well as triple glazing and increased colour options.

The commercial glazing market has experienced steady demand in recent years with office construction in particularly a key driver of growth. However, continued over-capacity in the industry, especially in the PVCu sector, is resulting in intense competition for business mainly amongst the larger retail suppliers. The market for residential windows is largely driven by demand in the replacement sector. Value growth 2015-17 for residential windows was good as manufacturer, distributor and materials price increases were applied, however from H2 2017 both volume and value growth has slowed due to lower levels of demand.

The residential entrance doors sector has benefitted from sustained demand from the replacement sector, but increased competition has led to some squeezing of value growth. Following significant growth in 2016, the market for curtain walling has flattened in 2017 and H1 18 as demand from the commercial offices, in particular higher value glazed facades, has slowed.

The supply structure in the overall door and window market remains very fragmented, comprising a mix of vertically integrated retail glazing companies, PVCu trade fabricators and fabricator/installers, aluminium systems fabricator/installers, bespoke glazing contractors, composite door manufacturers, commercial glazing specialists, roof light manufacturers, steel window manufacturers and major joinery companies, as well as others.

There has been some corporate activity in the sector in recent years, along with major changes among the larger firms. In particular, the aluminium sector has experienced a period of consolidation.

Jane Tarver of AMA Research said: “In 2018, the prospects for this industry in the short-medium term remain challenging with little or no growth forecast 2018-19 as the economy remains volatile with some uncertainty over short term prospects. Longer term the outlook is mildly optimistic with lower growth forecast than in previous years but for a return to average growth of around 2-3% towards the end of the forecast period.”

Residential new work is forecast to provide opportunities within the window and door market but with RMI and residential replacement programmes likely to be somewhat depressed by lower consumer confidence levels and spending. The non-residential sector is facing additional challenges and is likely to see subdued growth in the commercial glazing sector, and decline in other sectors such as ground floor treatments. Medium term prospects for the commercial windows sector will be determined by the return of confidence in the private commercial construction sectors, particularly for offices.

Ultimately, the industry is mature and, in the longer term, heavily dependent on replacement demand in the residential sector, a market which into the medium-term will be influenced by aspects such as security, aesthetics, improved thermal performance/energy efficiency and product failure, which will remain the key reasons for replacing windows and doors.

The ‘Door and Window Fabricators Market Report - UK 2018-2022’ report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.

Facilities Management Outsourcing - Corporate Sector - 5 Key Facts

• In 2017, Facilities Management outsourcing in the central and local government market was estimated to be worth over £4.3bn.
• Social housing accounts for 45% of market value.
• The total running cost of the central government mandated estate in 2015/16 was estimated at over £2.5bn.
• The housing associations’ stock has generally been rising over the last few years, increasing 6% between 2012 and 2016.
• The UK FM market is fragmented in nature, with the leading 5 operators only accounting for an estimated 35% of market value.

These facts have been extracted from AMA Research's 'Facilities Management Outsourcing - Corporate Sector Report – UK 2017-2021 Analysis' available for purchase now.