Following a difficult period, the commercial glazing
market has seen a modest increase in 2013, followed by significant growth in
2014 which appears to have been sustained in 2015. Growth in 2014/15 has been
mainly driven by rising demand in the office construction sector and by
late-2015 there are signs of growing demand for new Grade A office space in
London, as well as other cities, which is likely to stimulate growth for
commercial glazing from 2016 onwards.
Construction output in the education sector has also been
strong in 2014/15, which is surprising given the public sector capital budget
cutbacks. The education sector is also likely to see growing demand with the
roll-out of the Priority Schools Building Programme (PSBP) in England as the
replacement for BSF, which should deliver £2.5bn worth of new schools to complete
by 2017, and the University Technical Colleges programme and similar schemes in
Scotland and Wales.
However, not all sectors are performing well. In
healthcare, the shift away from building large hospitals towards smaller primary
care facilities has meant less demand for curtain wall, roof glazing and
windows. The decline in High Street retailing – as well as in retail parks and
out-of-town developments - will probably continue, as online shopping continues
to penetrate the market. In addition, the grocery multiple sector is also
experiencing a major cutback in store development programmes, which will have
negative implications for the glazing industry.
In terms of product sectors, commercial windows is the
largest sector accounting for over 50% of sector sales, with curtain wall and
ground floor treatments both substantial markets. Demand for curtain walling
has been particularly buoyant in 2014/15 – growing by around 10% per annum and
driven primarily by a recovery in office construction – particularly in
London. Roof glazing accounts for the
smallest share at less than 10%, though rooflights are in demand for both
commercial and domestic applications. Aluminium is still the dominant frame
material in the commercial glazing market, but timber, PVCu, steel and
composites all have reasonable shares and sector strengths.
On the supply side, some product sectors have seen
relatively little change other than some smaller companies going out of
business, and among the systems companies the market has remained fragmented
with no truly dominant suppliers.
Andrew Hartley, Director of AMA Research said: “In the aluminium systems supply sector, the
market is broadly split, with the 10 largest accounting for around 90% of this
market. However, more difficult market conditions in 2012-2013 has led to a
significant contraction among fabricators and installers, with several players
ceasing trading, though order books have improved in 2015.”
Key to medium-term growth will be
continued recovery for the private commercial construction sector, which is
forecast to be the main driver for growth into the medium-term - and should
more than offset the less positive performance of the public sector. As a
result, the market outlook for commercial glazing in key application areas in
office construction continues to offer the best areas for growth in the near to
medium term future, though the leisure/entertainment construction sector also
offers good opportunities.
The commercial glazing market is forecast to have grown
by 5% in 2015, with further growth of 4-5% forecast for 2016. Forecasts are for
more moderate, but steady, underlying annual growth at 3-4% from 2017-19, and
AMA’s report highlights differences between sectors which will have
implications for contractors, product and material suppliers in different
markets.
The ‘Commercial
Glazing 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.
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