Thursday, August 30, 2018

Integrated systems stimulate growth in the UK active fire protection sector

The total market size for active fire protection systems in the UK saw good growth to 2016 at between 7% and 9% per year, in line with higher levels of construction output across key end-use sectors such as education and offices. However, AMA’s estimates - which exclude installation, service and rental income - suggest weakening growth to 3% in 2017 and 2% in 2018, due to a fall in overall business confidence, with medium term forecasts to 2020 also moderate.
The sector is mature, and in the absence of any significant changes to Building Regulations and Standards in recent years, has been primarily driven by the wider performance of the UK building and construction market. That said, publicity and interest surrounding the fire protection industry has increased following the Grenfell Tower tragedy, and it is likely that the sector will see additional investment in the medium term.
In the wake of the Hackitt Review, Fire Industry Association members have reported a significant increase in enquiries relating to fire safety, although the latest feedback provides limited evidence that this is leading to increased new orders for fire protection products, with no formal legislation in relation to this introduced at this stage.
In terms of product mix, the active fire protection market is comprised of alarms or detection systems and suppression systems and equipment. Alarms and detection systems account for around 62%, with the majority of installations of products and systems going into the non-domestic sectors, while domestic smoke alarms account for a smaller percentage of the market in value terms.  
A key feature of the market is technology and increasing integration with fire and security systems. Improvements in wireless capability has led to further growth in the use of wireless smoke detectors, particularly for retrofitting within existing areas that may be hard to wire, such as historic buildings.
IP functionality is now standard in many fire control panels, and many smoke detectors have wireless capability. The greater use of IP within fire protection products has also enabled the use of video fire detection, where CCTV images are analysed by mathematical algorithms to detect smoke or flames.
A key driver of innovation has been the industry’s desire to continue reducing the likelihood and number of false alarms, and the majority of innovations has been in detection technology rather than suppression. Developments have included improved capability of sensor technology in smoke detectors that can detect more quickly, with greater reliability and with a greater degree of differentiation between different types of smoke and vapours. Another trend is the growing installation of voice evacuation devices to replace traditional sounders and sirens.
The active fire protection market continues to experience price competition and a strong focus on the lifetime cost of fire and security systems, and many suppliers are offering additional services including maintenance and service contracts to improve revenues and generate repeat business.
“Forecasts suggest slower growth over the next few years for the fire protection market” said Hayley Thornley, Market Research Manager at AMA Research. “With no immediate significant technical changes expected in the regulatory aspect of fire protection as a result of the Hackitt Review, the main driver of future growth will be the moderately positive outlook in construction activity in general, and in particular non-residential construction, with some output sectors which generate significant demand for fire protection products are forecast to slow down in the next few years.”
Key end use sectors for the active fire protection market include industrial and office markets, and annual construction output in both of these sectors is forecast to decrease between 2017 and 2019, and have a negative impact on demand for active fire protection, particularly on the suppression sector. Strong growth is however forecast in the UK data centres market, which may generate particular demand for inert and synthetic gaseous suppression systems, and though the domestic sector is not a major source of demand, the growth in high-rise construction may provide a stimulus for sprinkler-based systems.
The Active Fire Protection Market Report – UK 2018-2022 report is available now and can be ordered online at or by calling 01242 235724.

Tuesday, August 28, 2018

4% growth in the UK market for street furniture

The total value of the street furniture market that is supplied to or influenced by local authorities and placed in public spaces or highways controlled by local authorities, is estimated to be worth around £328m in 2017, having grown by around 4% in the year. The local authority sector is thought to account for around 80% of the total market for street furniture. Forecasts indicate some growth over the 2018-2022 period, though growth rates are likely to be modest due to increasing pressures on budgets.
Street furniture can include a wide range of products, but the main product sectors can be considered to be; benches & seats, bins, bollards and barriers, planters, posts and rails, cycle stands and signage, including street name plates. Some street furniture products are more susceptible to the state of the economy than others - for example, damaged bollards and litter bins will need to be replaced, whereas plans for newbuild development and regeneration schemes using more expensive seating, planters and other optional etc. can be amended.
It is estimated that there are around 500-600 companies supplying street furniture, some of which manufacture branded products in the UK, while some manufacture for others without having a high profile with end-users. However, a substantial volume of products – usually at the lower end of the market - are imported into the UK from China and other countries.
Many companies specialise in only one or two products, or one type of material, such as stainless steel or timber. There is also a growing market for bespoke street furniture products, where the manufacturer is involved with the architect or specifier at an early stage of the project in order to produce a unique design for a particular location.
The future prospects for this market are for growth, though at a low level of around 1-2% per year between 2019 and 2022.
Keith Taylor, Director at AMA Research, said: “With grants from Central Government to Local Authorities falling, urban landscaping may be regarded as a lower priority for spending compared to social services and other costs and therefore likely to be under continual pressure for funding. In addition, maintenance budgets for street furniture may be limited because of high demand from other areas of highway maintenance expenditure, such as filling pot holes and converting street lighting to LEDs.”
However, demand for improving the urban environment is strong, with safety a key driver influencing decision-making, and increasing demand for certain types of street furniture, for example related to cycling.
Growth in the new housing market, in particular for larger-scale developments for affordable housing or private rental, should also benefit the overall street furniture market. There are schemes coming forward in many parts of the country to support the government’s aim to build more houses, including social housing. Despite the vote to leave the EU casting doubt on the future of the UK housing market, the overall outlook for residential construction remains positive, with modest growth over the next five years.
The ‘Street Furniture and Lighting Market Report - UK 2018-2022’ report is available now and can be ordered online at or by calling 01242 235724.

Wednesday, August 22, 2018

Hotel, leisure and entertainment construction output grew by 33% in 2017 to reach £9.4bn

Dominated by the private sector, the entertainment and leisure sector has experienced more positive construction output conditions than many other sectors over the past 5 years. Despite a dip in 2015, output growth in the sector has remained between 2013 and 2017, and overall indications are that output grew by around 33% in 2017 to reach £9.4bn. Expansion and investment has been largely confined to the budget hotels, health and fitness and more recently the cinema segments, with less buoyant activity in other sectors.
Going forward, there is a good pipeline of leisure sector work forecast, with a mix of theme park, resort, hotel and sports stadia in the pipeline, which should underpin construction growth over the forecast period. In addition, there are also a number of projects currently proposed or under discussion for the refurbishment and redevelopment of a number of sporting venues/stadia, with the larger projects likely to make a significant contribution to entertainment output into the medium-term.
The hotel sector will provide significant impetus for output growth with into the medium-term with the budget hotel sector a key driver of investment activity. The current erosion of the Pound Sterling against other currencies is making the UK an attractive holiday resort, and underpinning investment in hotels and restaurants, whilst the health and fitness sector should also continue to underpin output growth with the budget gym sector continuing to grow. 
However, there are sub-sectors within entertainment that are likely to do less well into the medium-term. The public house estate is facing issues of increased rents and falling turnover, and in addition, the betting and gaming sub-sector has also been affected by the move to online games and virtual casinos.
Overall, sector output is forecast to see good overall growth to 2022, albeit at lower growth rates of between 3% and 5% when output is forecast to be around £10.9bn; however, the diversity of the sector means that growth prospects vary considerably between sub-sectors, with recent growth in the budget and high-end hotel and budget gym and restaurant sectors helping to offset the decline in the pubs and clubs sectors.
Many new construction projects in the hotel and leisure sectors relate to re-fit or refurbishment as hoteliers and leisure facility owners focus investment in their portfolios through refits, re-branding and refurbishment programmes, rather than newbuild, and as such there remain opportunities for refurbishment and re-branding for the larger hotel and leisure operators.
Keith Taylor, Director at AMA Research said:
“There is no doubt that the hotel, leisure and entertainment construction sectors have performed very well in 2016 and 2017 compared to many other sectors. However, the 33% increase indicated by the construction output figures was partly caused by a revision of both historical and current ONS figures, and for 2018 we are likely to see more realistic figures for output growth”  
The ‘Construction in the Hotel, Entertainment and Leisure Sector Report - UK 2018-2022' report is available now and can be ordered online at or by calling 01242 235724.

Tuesday, August 21, 2018

Build to Rent forecast to become a key growth area in the UK housebuilding market

Including residential conversions, there were around 258,000 new dwellings delivered across the UK in 2016/17, up by 13% on the previous year. For 2017/18, it is estimated the rate of growth has been similar, with 280,000 new homes being added. Average selling prices have also been increasing year on year over the same period, contributing towards strong growth in total housebuilding contractors output, which nearly doubled between 2011/12 and 2017/18, though forecast growth to 2021 is more modest.
Volume growth has largely been driven by increasing activity levels in the private housing sector, underpinned by a combination of low interest rates, competitive mortgage deals and especially the Help to Buy equity loan scheme.
The key reason for this strong growth in value has been a marked shift away from 1-3 bedroom flats towards higher value 4+ bedroom detached and semi-detached homes, particularly across London, the South East and East of England. London has also been where demand for flats /apartments has also remained strongest. As with commercial properties, the luxury apartment sector has been a key area of investment for overseas investors, though following the EU Referendum result, confidence among foreign investors in the UK has been wavering.
However, most other regions of the UK have also been affected by price increases, albeit to a lesser degree. While interest rates remain on the lower side, mortgage deals are likely to remain competitive although interest rate rises could easily reverse growth in the market. Affordability will therefore continue to be a key factor in sustaining demand, with the extension of Help to Buy equity loans in England through to 2021 expected to underpin demand for private sector new housing.
In contrast to the private housing sector, public sector housing completions have remained below Government targets, despite significant growth in demand for affordable homes. The main reason for this has been cuts to public sector funding, with the amounts available to housing associations and local authorities having resulted in falling investment in social housing schemes. However, with more housing associations now diversifying into affordable homes construction, there should be more of a balance between demand and supply over the longer term.
“What has been critical to growth in net additions to the UK’s housing stock has been sharp growth in the numbers of conversions, which has been driven by government’s granting of permitted development rights for the conversion of empty offices into dwellings. Although there will inevitably soon be a shortage of empty offices suitable for conversion, we expect there to be a shift towards conversions of vacant High Street facilities” said Keith Taylor, Director of AMA Research. “There has also been a recent relaxation of permitted rights concerning barns and stable conversions, which should contribute towards growth in the total number of conversions over the next few years”.
Taking these factors into consideration, we would expect the combination of completions and conversions to drive further growth in total completions and market values, to over 300,000 and over £42bn by 2021. Market prospects beyond 2019 will largely depend on levels of confidence among both consumers and business within the context of ‘Brexit’, the uncertainty of which leads to some degree of procrastination on the part of investors at this stage.
Purpose-built private rented housing (Build To Rent) is forecast to become one of the key areas of growth within the housebuilding industry. As well as attracting some of the larger housing associations an increasing number of larger private housebuilding groups are also diversifying into this sector, usually in partnership with private investors. To achieve desired rates of return, the focus of their investment is on large-scale apartment developments - in key parts of London, the West Midlands and the North West – which offer economies of scale. As with PBSA, this is mainly being achieved through the increased specification of prefabricated building components and even full offsite building systems such as volumetric modular construction.
The ‘Housebuilding Market Report – UK 2018-2022 Analysis’ report is available now and can be ordered online at or by calling 01242 235724.

Friday, August 17, 2018

Housing deficit and skills shortages lead to sustained growth in the panelised modular building systems market

The UK market for panelised modular building systems has performed relatively strongly over the past 3 years or so, and is estimated to have grown by 26% between 2014 and 2017. The main product type is timber frame building systems, which is competing with light gauge steel, precast concrete and other engineered wood-based panels, including structural insulated panels (SIPS) and cross laminated timber (CLT) systems. Estimates for 2018 onwards are for 4% growth per year, until 2020. 
AMA Research’s definition of the market consists of pre-fabricated, 2-dimensional frames or panels in systems for constructing walls, partitions, roofs and floors, typically supplied to site as systems in flat-pack format.
Until 2016, the market for panelised modular building systems had seen steady demand resulting from improving conditions in the overall construction market, particularly in the residential sector, and the market has benefitted from an improved performance in some key end use sectors, including education, entertainment, leisure and offices, though more recently, the UK construction market has been less positive.
Several trends have been driving the market for panelised modular building systems. The drive towards sustainable development, coupled with the need to meet energy efficiency and carbon reduction targets, would seem to weigh in favour of offsite construction. Panelised modular buildings also generate less waste, typically have superior airtightness, and hence thermal insulation performance, than brick and block construction.
In terms of product mix, timber frame systems still constitute the largest sector of the panelised building systems market with a share estimated to be around 70%, largely due to a larger supply base and extensive usage in the Scottish housebuilding market as well as the self-build sector. By value, the timber frame market alone was worth over double the three other smaller sub-sectors combined, with light steel frame the largest of the three smaller sub-sectors.
The market has also benefitted from rapid development of timber engineering, which has resulted in many high-performance engineered timber products coming onto the market, including the likes of cross laminated timber panels and glue laminated timber products. Further growth in these product options may well further stimulate the overall panelised systems market.
Key end use sectors for panelised modular building systems are private and social housing, apartment blocks, schools, hotels, healthcare and care facilities and purpose-built student accommodation. Residential applications account for around 65–75% of the overall market, reflecting the predominance of timber frame in the building of both private and social housing.
“Over the next few years to 2022, there are several factors that will underpin a steady growth in this sector, probably over and above that forecast across the overall construction industry. These include an increasing use of Building Information Modelling, and an increasing number of public sector procurement frameworks” said Keith Taylor, Director of AMA Research.
“More importantly there is now a strong likelihood of an increase in the use of volumetric and other types of offsite construction method to help meet the chronic housing shortage and cope with the lack of traditional construction skills within the construction industry.”
The Panelised Modular Building Systems Market Report – UK 2018-2022 report is available now and can be ordered online at or by calling 01242 235724.

Thursday, August 16, 2018

Trading up activities continue to underpin growth in the UK window coverings market, but price competition remains a key characteristic

The UK domestic window coverings market has shown overall growth of 15% between 2013 and 2017, but lower growth rates of around 2-3% are currently forecast for 2018. The market has benefited from increased consumer spending in recent years as well as returning confidence in the housing market and the trend of trading up to more premium products for replacement purchases. Window coverings are considered a fashion item, reflecting the latest styles and tastes, therefore encouraging more frequent updates; consumer demand for convenience, has also led to rapid growth in online sales.   

Whilst the window coverings market can be considered mature, the sector is highly innovative, with frequent product introductions. These include new materials, contemporary designs and the uptake of motorised options; the latter are becoming more affordable and mainstream. The shutters sector is also continuing to grow faster than other areas of the market with impressive annual growth rates. The market does however remain highly competitive, with greater transparency of prices on the internet enabling consumers to easily compare product offers and with widespread discounting taking place between suppliers and retailers.

Curtains account for the largest share of the product mix in 2017-18, but given the significant growth in online sales, the sector has been subject to widespread price competition which has constrained overall value growth. In order to differentiate and maintain margins some suppliers have expanded their custom made services. The blinds sector has seen overall growth of 16% between 2013 and 2017 but again has experienced significant price competition from the growth of online sales. However, the advances in fabric and controls technologies have helped to underpin market value as consumers increasingly trade up to more premium products for replacement purchases.
Both the shutters and curtain suspension sectors have benefitted from the current interior design trends that favour controllable shading options as well as highly decorative elements. The shutters sector continues to benefit from the aspirational nature of the product as well as the range of colour options and increasingly attractive prices. Ease of use as well as focus on decorative elements have underpinned modest, but consistent, annual value growth for the curtain suspension systems sector.
The supply of window coverings is fragmented but has been subject to some consolidation amongst major players. Most significant was Hunter Douglas’s acquisition of Hillarys in 2017. The distribution sector is highly diverse and subject to continued growth in online sales by both generalists and specialists in window coverings. Most suppliers with physical stores now have an omni-channel presence, although consumers are becoming more confident in ordering even custom-made products online. 
Jane Tarver of AMA Research said:
“The domestic window coverings market is forecast to grow by 11% overall from 2018-2022 underpinned by the replacement market but with intense price competition continuing to be an overriding characteristic. However, although considered to be mature, the market remains highly innovative with new products, designs and features, such as automation, likely to underpin the trend for trading-up to premium priced products into the medium-term.”
There is likely to be further consolidation within the market place as labour and distribution costs continue to increase and organisations seek to achieve additional economies of scale.  The distribution channel structure is also likely to be affected by the overall structural changes in the retail sector as online shopping continues to gain share. Whilst a blended approach of both online and offline channels is likely to be offered by larger players in the marketplace, price competition will continue to abound online in the lower to mid end of the market.
The ‘Domestic Window Coverings Report – UK 2018-2022’ is available now and can be ordered online at or by calling 01242 235724