Sustained recovery forecast in the UK Commercial and Industrial Doors and Shutters market

The UK market for industrial and commercial doors and shutters experienced a difficult period in 2009-12 but has shown some recovery in 2013/14 and is worth in excess of £400m. The improving overall performance has been underpinned by a combination of a recovery in construction activity in the industrial/ warehousing and offices sectors.

Legislative changes have also had a significant impact on the sector in recent years. For example, in terms of replacement and refurbishment, the Fire Safety regulations and the Corporate Manslaughter Bill helped to influence investment in replacement and refurbishment doors and shutters during the downturn, and The Equality Act 2010 (formerly the Disability Discrimination Act) has helped drive growth in demand for retrofit and replacement of existing access areas with power-assisted and automatic doors and door controls. As a result, replacement installations account for around 60% of sales across the sector, though this varies between product groups

Personnel doors accounts for around 55% of the market and incorporates timber doors, hinged steel doors, aluminium framed manual entrance doors and automated pedestrian doors. In value terms, automated pedestrian doors represents the largest single sub-sector, although the timber hinged and steel hinged door sectors are also significant, and account for a combined share of almost 50%. Timber doors are largely used internally, with external usage continuing to decline in favour of steel and aluminium and other materials such as PVCu, which offer greater durability and lower maintenance.

The ‘industrial’ doors sector covers sectional overhead doors, high-speed doors, roller shutters, sliding & folding doors and flexible doors, and in 2014 this sub-sector accounted for some 43% of the total market for commercial and industrial doors and shutters. High-speed doors represent the largest and the highest added value sub-sector with sectional overhead doors the second largest sub-sector, followed closely by rolling doors and shutters/grilles. High-speed doors have increased their share of the market as building owners have become more conscious of the need to rapidly open and close doors for heat/cooling conservation and for security purposes.

“The supply of commercial and industrial doors and shutters remains very fragmented, with the larger suppliers supplying major construction and RMI contractors, and the smaller suppliers focusing on local and specialist sectors, as well as RMI and servicing” said Andrew Hartley, Director of AMA Research. “While timber doors are supplied primarily by UK specialist timber door manufacturers and joinery companies, the automated pedestrian door and industrial door sectors are dominated by international suppliers.”

The outlook is for sustained recovery in both the commercial and industrial door markets with forecasts of around 3% growth in 2015 and further steady modest annual growth of 3-4% through to 2019 to reach a value of over £490m.

The ‘Commercial and Industrial Doors and Shutters Market Report – UK 2015-2019 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.

UK water heating market to grow by 6% between 2015 and 2019

UK water heating market saw marginal growth in 2014, with an increase of a further 2% by value expected during 2015. Between 2010 and 2012, the UK water heating market was comparatively volatile in line with the uncertain economic situation at this time. However, since 2013 the market for water heating products has modestly increased, with demand picking up as the economy improves.

The core product sectors of the UK water heating market are; hot water storage systems, which account for around 70% of the market, instantaneous water heaters and boiling water heaters and taps.

The number of homes with hot water storage has declined significantly in recent years, with the increasing reliance on combination boilers for hot water provision. The vast majority of new homes now have a mains pressurised system installed as standard, predominantly in the form of an unvented storage cylinder in larger properties and a combination boiler in smaller to medium properties and apartments.

The market for instantaneous water heaters has seen some moderate growth more recently, particularly in the commercial sector. However, demand for multi-point instantaneous water heaters has been negatively impacted by the development of the market for combination boilers. This sector is dominated by replacement demand, which is a large, but declining market. The market for boiling water heaters for hot drinks has seen good growth over the last 5 years, particularly in commercial applications such as offices, staff canteens and factories.

Positive influences on this market include the growing concerns about energy efficiency and the environment. The government has introduced a significant amount of environmental legislation in recent years placing a greater emphasis on carbon emissions and fuel efficiency. In general terms, water heating products are being increasingly designed to deliver improved thermal performance, in order to achieve lower running costs. This trend has been influenced by the further revisions to Part L in 2013. These changes have contributed to a reduction in the overall space and water heating load in the new build sector, with more stringent energy efficiency and insulation requirements.

The majority of water heating products are distributed via the trade channels such as builders/plumbers merchants, electrical wholesalers and specialist heating distributors. In addition, there are an increasing number of products sold via the internet either through online retailers or, in the case of boiling water taps, direct via manufacturers’ websites.

“The future performance of the UK water heating market is likely to be influenced by overall trends in house building and construction, RMI activity, fuel prices, energy efficiency legislation, renewable technologies, levels of personal disposable income, patterns of hot water consumption and niche segments such as the self-build market” said Keith Taylor, Director of AMA Research. “The ErP Directive and other initiatives such as the ECO scheme and the Green Deal will also influence growth to some extent, and the widespread roll-out of smart meters over the next few years will impact on the demand for energy efficient water heating solutions.” 

Current forecasts are based on steady recovery in the economy and on consumer and business confidence levels. By 2019 it is estimated that the UK water heating market will have increased by 6-7% when compared to the estimated market size in 2015.

The ‘Water Heating Market Report – UK 2015-2019 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.

Strengthening demand in the commercial offices market drives a recovery in construction work in the sector

Following a difficult few years, the UK commercial office market has experienced a strong bounce-back in output in the last 2 years, as both business and consumer confidence began to return. Demand has increased across London and many key regional cities, representing a significant growth in take-up and falling supply, and office rents are now also returning to growth.

The offices sector was particularly hard hit by the downturn with funding severely restricted and a shrinking development pipeline leading to a significant decline in output and new orders. However, the last 18 months has seen renewed demand intensifying across the UK office market, leading to a growth in construction output by 13% in 2014 to reach £8.7bn.

As a result of improved market conditions, total take-up for 2014 was estimated to be the highest since 2007 and highlights a return to growth for the office market as a whole. The majority of take-up in 2014 was for Grade-B space, reflecting the very limited supply of Grade-A available stock. In addition, a sustained recovery in the central London office market in 2014 saw take-up at its highest annual rate since 2001 and all London markets have seen increased occupier demand over the last 12 months.

The outlook over the next 4 years to 2019 remains buoyant for the commercial office construction market driven by an acute lack of existing stock across many cities, increased demand for space from occupiers and a significant number of lease expiries due over the next few years, which will further fuel demand.

“In terms of opportunities for the construction market, the resurgence of speculative office development, together with a notable increase in office refurbishments is driving work for contractors operating in the commercial offices sector” said Andrew Hartley, Director of AMA Research. “Traditionally, office fit out and refurbishment work has been dominated by specialist firms, but this is changing with a number of larger contractors taking advantage of the increase in office refurbishment work. “

Going forward, prospects for office construction output are on the rise, with London and the South East leading the recovery and, given the nationwide strength in demand, it is expected that output in the commercial offices market will continue to grow by between 6-8% per annum over the next few years.  

The ‘Commercial Office Construction Market Report – UK 2015-2019 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.

Growth prospects look positive in the UK health and safety products sector

The UK market for health and safety products in non-domestic applications experienced steady growth in 2014 to reach an estimated value of around £730m, having declined in value terms between 2011 and 2013.

This market is mature and, as a consequence, is heavily reliant on activity and output in construction and manufacturing, as well as a strong economy. It is also strongly price driven as a result of rising imports, which has constrained value growth in recent years.

Personal protection equipment accounts for the largest sector of the market in value terms, with an estimated share of over 40% in 2014. The sector covers a wide range of products including head, face, eye, hearing and respiratory products, as well as clothing, gloves, safety footwear and fall protection equipment. Hygiene products and first aid products also account for significant shares of this market, though these sectors are characterised by comparatively low value refill items, intense price competition and a strong presence of unbranded products, which have restricted market growth.  

Key factors driving recent growth include new legislation/updates to existing legislation, as well as regular initiatives by the HSE focusing on specific industries or activities – such as the construction sector – and targeting poor standards and unsafe working practices as part of a nationwide drive.

Periodic health scares also drive sales and stockpiling of equipment by the public sector and essential services, although the influence is generally temporary. They also tend to refocus attention on the importance of handwashing and other anti-contamination measures, particularly in hospitals and public places.

The use of reusable products, where possible, has become a permanent feature of the market, driven in part by cost but also by convenience and the need to avoid contamination and the spread of infection. Product development continues to focus on value added features to sustain value growth.

“In the short term, demand will be sustained by the current positive economic trends, with growth in construction, manufacturing and services driving recovery” said Andrew Hartley, Director of AMA Research. “In the medium term, the outlook for construction remains fairly positive, with growth in housebuilding and general construction activity. Changes to legislation are ongoing and the outlook for employment is also positive.”

Distribution is focused around health & safety specialists and general distributors, with a combined share of over 50%, with online sales growing. As a result, price competition will remain intense, particularly in terms of low-value products and disposables, and this will constrain value growth, with the cost of compliance a relatively heavy burden, particularly for SMEs. However, the market is forecast to continue growing in the medium term, with the annual rate of growth peaking in 2016/17 at around 4%.

The ‘Health and Safety Products Market Report – UK 2015-2019 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.

UK market for replacement windows and doors returns to growth

UK market for replacement domestic doors and windows is a substantial but mature sector. Volumes have been in steady underlying decline, but the market returned to value growth in 2014, partly reflecting the release of pent-up demand due to rising consumer confidence and an improving housing market. 

The dominant position of PVC-u, especially in the windows and patio door sector, is a key feature with the PVC-u dominated direct sell route to market particularly strong in these product sectors. Aluminium and timber also retain shares, though aluminium is largely restricted to specific applications or products. Composite doors have gained significant market share and have grown rapidly in popularity in recent years.

Some major restructuring has been seen in this sector in the last 2 years, with further rationalisation anticipated at all levels of the supply chain. In particular, the composite door sector has seen significant change in terms of acquisitions and companies exiting the market in 2013/14.

Our forecast for the development of the door and window replacement market for 2015 is for further good growth in the region of 5%, given continued growth in the general economy, strong consumer confidence and a good housing market. For the longer term, forecasts are for steady recovery of around 2-3% growth, reflecting market maturity and a steadily rising economy – though growth rates are unlikely to be buoyant on a sustained basis.

“We anticipate that, certainly in the short term, the market will be primarily driven by demand from the private rather than public sector, because of the impact of cuts in government spending for the forecast period” said Andrew Hartley, Director of AMA Research. “However, a return to the volumes seen in the 1990s is not likely. Increases in the market will be limited by a number of factors including the maturity of the market, high household penetration levels, and the extended lifespan of door and window products.”

New legislation may encourage replacement of windows and doors to some extent, as regulations for thermal efficiency etc. become stricter over time, while security and appearance will also drive second/third-time replacement. New niche sectors also continue to offer opportunities – bifold doors have been a recent example as homeowners look to open up access to their garden areas with large, flexible glazed areas.

By 2019, it is expected that the market for domestic replacement windows and doors will reach a value of around £2.5bn at retail selling prices. In the longer term, the UK replacement door and window market is likely to see further consolidation at all levels.

The ‘Domestic Replacement Door and Window Market Report – UK 2015-2019 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.

Moderate growth expected in healthcare construction

Having reached a peak of £5.9bn in 2008, health sector construction output has subsequently declined by 48%. Cuts to the capital budget initiated by the Government since April 2011 have had a significant impact on health sector output and the outlook remains one of moderate improvement at best to 2019.

However, despite this decline, it’s worth emphasising that healthcare still represents a major area for construction work. In recent years, the mix between public and private sector output has changed, with the public sector share having experienced significant fluctuations due to budget cuts and changing attitudes towards the use of PFI and other private funding sources.

With more healthcare services being driven out of the acute setting and into the primary sector, GPs are very firmly at the core of the NHS and the emphasis is now upon the upgrading and refurbishment of the GP estate. Investment in the primary care estate has generally lagged behind the secondary or acute sector, but in the 2014 Autumn Statement, the Chancellor announced a £1bn funding package for investment into GP facilities which will help upgrade current premises to deliver additional services and care outside hospitals.

Established methods of delivery of new capital developments, such as PFI, LIFT, Procure 21+ and Express LIFT are now undergoing change under NHS organisational reforms. The broader policies of developing GP-led commissioning have undoubtedly led to greater co-operation between the private and public sectors, and more work with private providers and their construction teams, as financial constraints continue and public sector capital becomes more difficult to obtain.

Health sector construction output is forecast to pick up slightly in 2015 with value growth of around 4%, though forecasts indicate moderate annual rates of growth to 2019 when output is forecast to reach £3.6bn. Although the latest trend for new orders has been upwards this is unlikely to result in a rapid upturn in output in the medium-term, particularly while budgets remain under pressure.

A slight increase in the NHS capital expenditure budget in 2015-16 to £4.7bn may help to sustain output growth in 2016 and beyond as financial pressures on trusts to commission new facilities and upgrade existing ones begin to ease. However, the medium-term prospects for health sector output are still severely constrained by continuing low levels of investment, though medium term prospects are subject to the outcome of the Election.

“Whilst health spending for 2016-17 and 2017-18 has not yet been announced, the health budget continues to be under pressure. A change of government could also alter the focus of health sector capital expenditure” said Andrew Hartley, Director of AMA Research. “Key to the future performance of the health sector is the changing focus from larger-scale regional provision to smaller, locally based services based on LIFT/P21+ procurement programmes. This is set to continue as health and social care services are increasingly integrated at a community level.“

The ‘Healthcare Construction Market Report – UK 2015-2019 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.

The UK Home Automation market grows by more than 80% over 5 years

The home automation market has continued to experience good growth in 2014 and is currently considered to be in its initial growth stage, supported by over 83% rise in sales over 2010-14. Growth is currently forecast to continue into the medium-term, with market value forecast to double again by 2019.

Although home automation systems have been available in the UK for many years, it is only recently that they have moved away from an upper market niche into a more mainstream market.

The principle behind home automation systems is the linking of electrical/electronic devices to provide increased whole house controllability either through a single control panel or single control device for each element. Elements included in home automation can include access & security controls, climate control, lighting and shading controls, home entertainment systems and communication systems.

Technological advances driving the home automation market include the progress of wireless controls and LED lighting, but also include the widening market for connected audio and visual content via home networks. Take up of wireless routers/internet has also benefited the home automation market, with increasing numbers of suppliers offering wireless systems based around the home WiFi network. Growth of wireless systems has also resulted in lower installation costs and reduced the complexity of the installation.

“One factor contributing to growth has been the adoption of an “app” driven control interface, which has changed the perception of how user-friendly some home automation systems can be” said Andrew Hartley, Director of AMA Research. “Remote control of systems has also been a key driver for growth as it enables control of all aspects of the connected home from within the house, at work or even abroad via smartphones and tablets.”

The offering of modular systems which offer the opportunity of future expansion has also driven growth. Increasing focus on domestic energy efficiency has also been beneficial, with development of smart heating and hot water controls that allow more flexibility than traditional heating controls. In addition, the development of systems aimed at the experienced DIYer has meant that the average price of an entry level system has become more affordable and placed home automation systems within the scope of a much wider, appreciative audience.

The UK home automation market is dominated by a number of global suppliers with significant experience of more developed home automation markets than in the UK – e.g. USA and Europe. However, the growth of home automation systems in the UK has seen a number of smaller suppliers and re-sellers enter the market.  In addition, wireless connectivity has also encouraged larger global lighting, electronics and heating controls groups to release products that can easily be incorporated into a home automation systems.

Recovery in the housebuilding sector will encourage use of home automation systems in the near future, particularly under the Zero Carbon Homes Standard. Recent growth of intelligent heating controls is likely to continue into the medium-term, with rapid innovation likely to be the key driver. The roll out of the Smart Meters programme is likely to mean that householders will have more direct information regarding energy use in the home and could invest in connected controls in order to obtain optimum energy efficiency.

Micro-generation is also likely to provide a key driver for growth in future years, with power hungry appliances likely to be set to turn on only when power is being generated or when cheaper tariffs are available. Forecast growth of “the internet of everything” is likely to result in increased connectivity within home networks and include more intelligent appliances such as cooking, refrigeration and washing, etc.

Recent innovations in streaming of audio visual content is likely to lead to multi-room systems increasingly becoming the norm, adding further opportunities for home automation systems. The lighting controls sector has been transformed by the advent of LED technologies in recent years, which are likely to continue to develop into the medium-term resulting in increased applications.

Comparisons with other regions where the home automation market is more developed indicate that there is significant growth potential in future years. Medium-term prospects for home automation remain positive with over 90% growth currently forecast to 2019, with market value of around £210m, with components accounting for over 50% of the market.

The ‘Home Automation Market Report – UK 2015-2019 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.