LED Lighting - 5 Key Facts

Did you know...

1) Non-domestic end users dominate the LED market in 2014, accounting for 96% of market value.

2) The four main suppliers; Philips, Zumtobel, Osram, GE and Havells Sylvania, are estimated to account for around 80% of the market.

3) Industrial lighting is dominated by high intensity discharge (HID) lighting with LED accounting for only 7% of this sector currently.

4) Infrastructure is a significant sector with many LED street and road light investment schemes underway and is estimated to account for 23% of the market.

5) Direct sales have a leading role in LED lighting distribution led by large scale, private and public sector projects, accounting for over a third of the market.

These facts have been extracted from AMA Research's report 'LED Lighting Market Report - UK 2014-2018 Analysis', available from www.amaresearch.co.uk or by calling 01242 235724.

UK Tool Distribution market saw growth of 8% in 2014

In 2014, it is estimated that the tool distribution market grew by 8% as a result of the improving economy which led to higher levels of construction and RMI activity. The tool market is mature and has, in general, seen moderate growth rates, though 2014 has proved to be good year.

Power tools account for an estimated 50-55% share of the market and hand tools for around 45-50% share. Hand tools is a mature, steady sector with few major changes in product development and sales are largely dependent on product replacements. In contrast, demand for power tools has benefited from new products and product innovation that help to drive sales, such as lithium-ion battery and brushless motor tools. Performance in the garden tools sector is heavily influenced by the weather in any given year, with 2014 a relatively good year, though performance in 2015 has been less buoyant.

Distribution of tools used in construction, RMI and gardening is highly complex and fragmented, reflecting the number and ranges of products offered, as well as the range of different end-users and contractors. Tool distribution comprises a mix of large national players competing with many regional and local companies, in both trade and consumer channels, but several major national and international groups hold significant shares in the tools market.

Digital technology is driving a change in buying behaviour in this sector, with the internet and, in particular, the use of mobile devices among tradesmen, becoming increasingly important. Whilst the internet-only channel is currently relatively small, its influence on distribution and sales is much wider. It has changed the way in which customers interact with suppliers - for example, there has been an increase in the use of ‘click and collect’ facilities that encourages people to visit stores, and leading to an increase in sales via trade counters. Social media is also gaining in importance for both promotional messages and customer feedback, assisting in growing direct sales.

“The future of the tools distribution market mix will depend on channel response to the opportunities and threats posed by the evolving distribution landscape and how quickly they respond to them” said Andrew Hartley, Director of AMA Research. “Over the past 2-3 years there has also been some consolidation within key distribution channels and this is likely to continue for the duration of the forecast period.”

Future prospects for the overall tools market are positive, with both domestic and non-domestic construction levels forecast to increase. There will be a continued expansion of cordless product ranges and brushless motors products, with other product developments expected to stimulate market growth, including tools that are more ergonomically designed for employee welfare as well as increasing lifetime and efficiency.

The tool market is forecast to continue growing in 2015, with steady underlying growth of around 3-4% per annum forecast in the medium term, providing the construction and home improvement markets remain reasonably buoyant.

The ‘Tool Distribution 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 Floor and Wall Tiles market to grow by around 5% in 2015

The UK market for floor and wall tiles grew by an estimated 4% in 2014, underpinned by rising demand from a combination of growth in housebuilding activity, home improvements and commercial applications. Ceramic & porcelain tiles dominate the mix in 2014 with an estimated value share of over 75%.

Following several difficult years in 2009-13, the outlook is for positive annual growth of around 5% in 2015/16 - underpinned by returning confidence in both domestic and contract sectors - followed by more moderate annual gains of around 3-4% to 2019 when market value is forecast to be over £550m.

Changes and trends within the UK tile market identified in the last edition of this report have continued into 2013-14. The main trend has been a gradual switch upmarket, particularly in the domestic sector, which has been dominated by stone effect porcelain & ceramic, as well as natural stone. In terms of decorative trends, fully or ¾ tiled bathrooms remain a key trend, but with stone effects and natural stone continuing to take share from plain tiles. Although neutrals continue to dominate the sector, there has been a trend for greater use of colour through Mediterranean and North African inspired designs and through the use of feature tiles, such as pop art panels, single tile motifs etc.

The trend for design breaks within a tiling scheme has become more prevalent, with combinations of tile sizes, shapes, textures and colours now used to create borders, frames, etc., for both wall and floor tiling installations. The stone tiles sector, and slate in particular, has undoubtedly benefited from the recent trend for texture in tiles, with growing demand for more riven products, particularly for texture walls. Wall tiles still dominate the sector, but floor tiles are well-established now, with share over 30%.

Imports have continued to increase share, and are now estimated at around 75%-80% of the market. In addition, more global suppliers are now targeting the UK market with the Middle East region becoming an important source country.

“The overall tiles market is likely to be characterised by price competition into the medium-term and beyond, as competition between tile types and other wall and floorcoverings will remain strong into the medium-term and imports continue their dominance of the UK market.” said Andrew Hartley, Director of AMA Research.

Medium-term forecast are related to the strength of the economic recovery, which in mid-late 2015 remains generally positive, and continuing recovery in the new housebuilding and key commercial construction sectors, such as offices and leisure. In addition, both consumer and business confidence have continued to improve. For the tiles market, this indicates potential for good short-term gains followed by steadier rates of annual growth into the medium-term, as indicated above.

The ‘Floor and Wall Tiles 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.

Upgrading and fit-out work dominates UK Food & Drink sector construction output

The food processing industry has performed better than the wider manufacturing sector in recent years and growth is forecast at between 3-4% in the short to medium term. Construction output in the sector is forecast to remain relatively buoyant with growth at a similar level of 3-5% over the next few years. The FDMP sector has recently seen increased capital investment levels, reflecting the growing optimism in the wider economy.

The food and drink manufacturing and processing industry (FDMP) is the single largest manufacturing sector in the UK, employing around 400,000 workers, and exports of food and drink products form an important proportion of UK trade. The value of UK food and non-alcoholic drink exports increased by over 6% in 2014, the 10th consecutive year of record growth. Exports of UK dairy are also at a record high.

The market is polarised, with over 8,000 companies active in the FDMP sector across the UK, and over 85% of enterprises qualifying as small. However, the top 5 UK food companies account for over £30bn in terms of turnover, with the leading 20 food producers operating over 300 manufacturing and distribution sites across the UK. In total, there are over 9,500 manufacturing sites and factories in the UK FDMP sector, with the bakery, meat processing and dairy industry operating the largest number of processing sites and accounting for the highest turnover. FDMP activity varies across the UK, with Scotland, the North West and Yorkshire and Humber having the highest concentration of food processing activity.

The industry is characterised by an ageing stock of manufacturing facilities and equipment, and new projects are mainly focused on upgrading existing assets to achieve greater efficiencies, leading to higher outputs and lower costs. Upgrading and fit-out work therefore accounts for around 80% of total output in the sector. Growing demand in certain sectors has driven capacity expansion, with significant projects in the dairy, beverage, meat and ready meals sectors recently completed or under development. However, with fewer new build factories now being built, there is more of an emphasis on regular maintenance of existing facilities ensuring that machinery and processing equipment is running efficiently.

Going forward, construction output in the food processing sector is likely to remain relatively buoyant, mainly driven by RMI activity, however, the industry faces the ongoing challenges of rising costs, compliance and regulatory controls, EU legislation and political priorities. Therefore construction output is forecast to grow by between 3-5% over the next few years to reach a total of around £475m by 2019.

“The impact of the recession and consolidation and rationalisation in the food industry has meant that food manufacturers have become more cautious about investing in new plants and facilities” said Keith Taylor, Director of AMA Research. “However, it seems the current focus is on refurbishment and modernisation projects aimed at improving production capacity and efficiency through initiatives such as automation and temporary processing“.

The ‘Construction Activity in the Food & Drink Manufacturing & Processing Industry 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.

Wall Cladding - 5 Key Facts

Did you know...

1) The overall value of the market was estimated at £1.8bn in 2013 covering products and materials.

2) The share of the market taken by curtain walling systems and structural glazing is 24% by value, but by volume it is significantly lower.

3) The end use mix for composite wall panels is led by commercial and public sector newbuild, which is estimated to account for 42% of the sector.

4) 2013 showed a sharp drop in activity levels for external wall insulation systems, to around 7.5m m2 reflecting the demise of the CERT energy programme in December 2012.

5)  Natural stone is used as traditional masonry and as facades on backing panels, with a market size estimated at 500k-700k m2.

These facts have been extracted from AMA Research's report 'Wall Cladding Market Report - UK 2014-2018 Analysis', available from www.amaresearch.co.uk or by calling 01242 235724.

Renewables drive strong growth in the Utilities Construction Market

Construction output for utilities, as with other infrastructure sectors, was fairly robust in 2014 with 9% growth, representing a significant increase on the previous year. The market has been strengthened by ongoing asset renewal programmes and by the very strong performance in the electricity sector. Current prospects for the utilities sector remain optimistic with output set to increase to around £11.9bn by 2019.

Construction output in the utilities sector in Great Britain has experienced overall growth of 64% since 2008, and has outperformed the wider infrastructure market over the last 2-3 years. Positive influences on this sector include the government’s commitment to renewable energy and the country’s energy security. Renewables generation is likely continue to be a key driver for growth for electricity output in the medium term, particularly from offshore wind farms.

Water was the leading sub-sector up until 2011, but its share slipped back dramatically in 2014. The water sector benefits to a degree from the continued focus of the regulator on improved customer service and water quality initiatives which have resulted in greater spending on improvements to mains and water treatment plants, and the water and sewerage sectors are likely to see some degree of recovery through major projects such as the Thames Tideway Tunnel. However, the change in priorities set by the regulators appears likely to lead to greater emphasis on service delivery and on RMI, rather than on new work, so that any recovery in share is likely to be modest.

Construction output in the electricity sector more than quadrupled 2008-14, and has contributed strongly to the overall improvement in the utilities construction sector in recent years. Underpinning construction output growth for the electricity sector during the past three to four years has been the expansion of the renewables sector. In addition, the decommissioning of outdated power stations both fossil fuel and nuclear and the construction of new generation capacity, as well as the programme of renewal and improvement to the transmission and distribution networks have all boosted construction output.

The refurbishment of the gas distribution network and building of new gas storage facilities have assisted in boosting output growth in the gas sector in recent years. Medium-term prospects for the sector remain fairly positive with the likelihood of further onshore and offshore gas storage facilities to address the issue of the UK’s energy security and increasing dependence on gas imports as North Sea production declines.

The telecoms sector is the most open of the utilities sectors in the UK. Telecoms revenues have remained steady over the period, despite increasingly competitive pricing for mobile contracts. Revenue from mobile data, driven by increased smartphone use, and from fixed internet, driven by the rollout of superfast broadband, have offset the decline in revenue from fixed voice calls. Another key development is the increasing availability and uptake of superfast broadband. BT reached its target for the roll-out of superfast fibre optic broadband of the UK in 2014, a year earlier than originally planned.

“Current prospects for the utilities sector into the medium-term remain optimistic with output set to increase until 2019. Fundamental to this positive forecast remains the influence of Government policy commitments in a number of areas such as the Renewables Obligation, energy security and the rollout of superfast broadband” said Keith Taylor, Director of AMA Research. “Another key influence is the influence of the regulatory environment in the water and energy sectors, which provides an underlying motivation for medium-term programmes of capital investment.”

Growth in utilities construction will also be underpinned by the Government’s National Infrastructure Plan, which outlines a number of relevant policies, and the implementation of a number of measures to incentivise private investment in these sectors.

The ‘Utilities Construction 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.

Growth of 6% in the UK Office and Home Office Furniture Market in 2014

The UK office and home office furniture market showed modest value growth in both 2012 and 2013, followed by stronger growth in 2014 of around 6%, indicating good recovery in the market. However, in volume terms, the market as a whole has continued to decline during much of that period. Current market conditions are looking more positive, supported by strong demand in London and the South East and the SOHO sector.

Despite the recent upturn, profitability among UK manufacturers remains poor. The office and home office furniture market remains fiercely competitive, with a large number of suppliers still operating in the market and there is also still an excess of production capacity in the industry, despite some well-known companies having ceased to trade, and this has resulted in suppliers and dealers having to cut prices further to maintain share. In addition, imports increased in 2014, after being fairly static for several years.

Imports are a significant factor in the market and are estimated to account for around 40% of the market. The most significant change in recent years has been the rise of China to become the major source for office furniture imports, with imports of adjustable seating from that source reaching almost £51m in 2014 (£44m in 2013) alone.

A large proportion of home office furniture is supplied in flat pack form by specialist manufacturers and sold through domestic furnishing outlets. The two main distribution channels for office furniture are the dealer network, which accounts for an estimated 45% of this sector, and direct sales to end users. However, retail outlets and mail order channels are also important, having benefited from continued growth in the SOHO market. Dealers have been losing market share in recent years but are continuing to differentiate through enhanced service levels and added value products, such as storage audits, free planning services, national showrooms, after sales service and maintenance.

In the medium term, demand for smaller desks is expected to continue, reflecting technological developments and changing work practices and additionally, some value will be added through the introduction of more accessories and a greater level of integration with other office products. Whilst technological developments, including better cable management and the increased use of wireless technologies around the office, are likely to stimulate demand in some sectors in the longer term, they are unlikely to affect demand significantly in the shorter term.

There has been an increased demand for bespoke desking in the systems sector, often consisting of small design changes to the colour, finish, shape or desktop size. Demand for ergonomic seating is expected to be resilient, although average prices are expected to experience downward pressure as newer competitors enter the market and the high level of lower cost imports continues. The requirement for more casual seating for reception, meeting and leisure or breakout areas is also set to continue, as more companies adapt to more flexible styles of working.

The storage sector is set to show modest increases in the next few years in line with the market as a whole, but in the longer term some decline may reflect the gradual adoption of electronic storage and the greater use of electronic data. However, there are several new product opportunities open to firms in this sector, particularly the continuing demand for personal storage solutions and the possibility of integrating storage with office furniture designs generally.

“In terms of the distribution structure, there are likely to be some changes, with the growth of the SOHO market benefiting the less traditional channels of supply, such as multiple furnishing retailers, superstores, mail order and the Internet” said Keith Taylor, Director of AMA Research. “The dealers’ market is expected to show modest growth in the next few years, although the share of the market held by dealers is forecast to decline slightly reflecting greater purchases through the SOHO sector.” 

The UK office and home office furniture market is expected to show steady growth in the medium to long term, with annual growth rates of 3-4% from 2015 onwards, following definitive signs that business confidence and the general economic climate are improving. The market is expected to reach a value of around £825m by 2019.

The ‘Office and Home Office Furniture 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.

Hotel, Leisure & Entertainment Construction - 5 Key Facts

Did you know...

1) New build construction output in the leisure, hotel and entertainment sector is worth around £6bn per annum.

2) The hotel and pub sectors account for a combined share of around 50%.

3) The low-cost gym sector is growing rapidly.

4)  Expansion and refurbishment in the restaurant sector is buoyant and largely driven by international chains accelerating their roll-out programmes.

5)  Overall output in the sector is forecast to grow by around 15% over the 2014-2018 period.

These facts have been extracted from AMA Research's report 'Construction in the Hotel, Entertainment and Leisure Sector Report - UK 2014-2018 Analysis', available from www.amaresearch.co.uk or by calling 01242 235724.

Office Furniture Dealers - 5 key facts

Did you know...

1) The size of the dealers’ market has been falling for many years, reaching just under £300m in 2014, compared with £358m in 2008.

2) The majority of office furniture is still distributed through dealers and contractors, with the direct selling channel as the second largest, currently estimated to account for 25%.

3) 57% of dealers source from between seven and nine different core suppliers for their products.

4) The share of the market held by the leading six office furniture suppliers has stabilised at around 35-37% in recent years.

5) The share taken by the SOHO market has increased in recent years and now accounts for around 28% of the overall office furniture market.

These facts have been extracted from AMA Research's report 'Office Furniture Dealers Market Report - UK 2014-2018 Analysis', available from www.amaresearch.co.uk or by calling 01242 235724.

UK Mechanical & Electrical Contracting market grew by 7% in 2014

The market for mechanical and electrical (M&E) contracting was estimated to be valued at around £16bn in 2014, following strong growth of around 7% during the year. A key area of growth has been installations aimed at improving energy efficiency and reducing carbon emissions, driven by increasingly stringent legislation and regulations, but also given impetus by the long-term cost savings that can be made by installing such systems, driven by underlying, increasing fuel costs.

However, market values remain some 13% below their 2008 peak. Following a decline in 2012, growth resumed in 2013 driven by improvements in office and leisure sectors in particular and private construction output in general, and this has continued into 2014 and 2015. However, the industry continues to face growing competition from other sectors such as FM, and M&E contractors are expected to diversify into wider service areas in order to build revenues, for example offering design and build capabilities or expanding to total management of hard FM projects.

As market conditions improve, M&E contractors are starting to experience the benefits of restructuring and streamlining exercises through improved margins. Consolidation activity amongst suppliers continues to be high within the market and this has led to a number of major players increasing in size. The growth in strategic acquisitions is also in response to the growing focus on integrated services within the sector with contractors widening the range of services offered.

“The fact that businesses within both the public and private sectors urgently need to find cost savings has led to demand for more energy efficient heating, lighting and ventilation systems, both the simple extract types and the mechanical extract and heat recovery types” said Keith Taylor, Director of AMA Research. “This type of work will also be stimulated by legislation and guidelines around carbon reduction and renewable energy sources and as a result energy management will become an even more important area of focus for M&E contractors.”

Current forecasts for the M&E contractors market indicate that it will continue to increase, though at a more modest rate of around 3-4%, until the end of the forecast period. Non-domestic construction output is set to increase during 2015 and remain positive through to 2019, though the government’s efforts to reduce public sector spending are continuing, and may lead to reduced opportunities within the public sector for M&E contractors in the next few years. However, areas such as university expenditure, student accommodation, Free schools / Academy schools etc. where private funding is being channelled into public sector projects, should continue to offer good opportunities. 

The ‘Mechanical & Electrical Contractors 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.