Growth of up to 9% Forecast in the UK Prefabricated Plant Rooms Market

The prefabricated plant rooms market is a developing sector and as such, has seen significant growth in recent years. Growth in 2015 is forecast to reach 7% compared with 2014. However, the sector’s performance is highly dependent on the performance of the wider manufacturing industry, the M&E engineering market and the overall construction industry. Following a significant fall in 2012, the market grew strongly in 2013 as a result of the improving economic climate and continuing growth in key end use construction markets.

Prefabrication within the plant room market remains a growing concept and penetration across many end use sectors is low, offering potential for continued good levels of growth. Some sectors, such as retail and leisure, have embraced this type of technology but there remains an ever widening number of end user markets into which this technology is being placed. The underlying trend towards increasing levels of off-site manufacturing in order to achieve cost savings and health & safety benefits has continued to support the market. One particular area of growth in recent years has been in the area of biomass, which has been driven in part by the introduction of the Renewable Heat Incentive subsidy.

Health and education represent the largest end use sectors, accounting for 34% of the market by value, with projects in this sector likely to be both complex and of high value. Leisure also accounts for a significant share, followed by the retail and domestic end use markets. Industrial sectors such as manufacturing and warehousing represent a further 5% with the remaining market made up of other sectors such as corporate offices, public sector buildings and agriculture. The leisure and agriculture markets are expected to continue producing opportunities for prefabricated plant rooms over the next few years, with hotels in particular, anticipated to exhibit good growth. However, penetration in these areas is higher, which may limit growth to some extent.

In terms of supply, the market remains split between smaller, specialist manufacturers and large M&E contractors for whom this activity is a small part of their overall portfolio. The number of new entrants continues to grow in this market, but there are still relatively few manufacturers currently active in the UK.

The lack of maturity in the prefabricated plant room market means it is likely to continue to experience strong growth rates over the next few years. The upturn in both the wider construction industry and the M&E sector are also driving factors, though the Government are continuing to seek ways of reducing the deficit by cutting public sector spending, which could limit public sector opportunities for M&E contractors in the next few years. That said there are a number of “schemes” whereby private funding is being channelled into public sector projects, such as university expenditure, student accommodation, Free schools / Academy schools etc.

The fact that many businesses are also keen to find cost savings has led to demand for more energy efficient heating, lighting and ventilation systems, with work also stimulated by legislation and guidelines around carbon reduction and renewable energy sources. As a result energy management will become an even more important area of focus for M&E contractors and ‘plant’ providers. The wider use of renewable energy systems is also likely to lead to greater opportunities in terms of integrating the renewable energy applications with building management systems and with other building services.

“Good growth in this market of 7-9% is forecast until 2017, reflecting the gradual return of confidence and greater levels of new build across many commercial, industrial and manufacturing sectors“ said Keith Taylor, Director of AMA Research. “The market is also likely to continue to be stimulated by the increasing emphasis on renewable energy, driven by higher energy costs and tighter legislation. Prefabricated plant rooms can effectively build efficiency into M&E designs from an earlier stage, which should also aid this sector.”

The ‘Prefabricated Plant Rooms 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.