Brexit uncertainty likely to limit growth in the UK wood floorcoverings market

The UK wood floorcoverings market has a high level of import penetration, and is therefore highly susceptible to fluctuations in exchange rates. As such, it was impacted by the downward movement of Sterling following the 2016 Referendum. Prior to this, the market had been showing good growth, increasing by 6% between 2013 and 2015. While signs at the start of 2016 were positive, the climate of uncertainty surrounding the Brexit issue and the competition from LVT meant that growth for 2016 slowed to 1%. Estimates for 2017 show value growth of around 1-2%.

Wood floorcoverings are now marginally the second largest floorcoverings sector in the UK, currently accounting for an estimated 16% of the market in value terms, a share which has fallen only slightly since it peaked at 17-18% in the 2004-07 period. The main competition has been the vinyl sector with increasing popularity of LVT in both domestic and contract providing significant competition for some wood floorcoverings products.

Market trends have generally been positive since 2011, with growth strengthening until 2016, buoyed by rising consumer confidence as the economy improved and by improvement in the housebuilding and wider construction sectors. However, as in other market sectors, there was considerable variation between the performances of individual suppliers, together with strong competition from other smooth flooring products. Design trends have seen the increased use of greater colour variations and mixed plank sizes to allow bespoke flooring installations, but also the use of texture and embossing to replicate features such as knots, “distressing” and antique floors.

Domestic DIY installations of wood flooring are still below pre-recession levels and seem unlikely to improve in the short to medium term, as major DIY multiples carry out significant restructuring programmes in the face of consumer reluctance to carry out their own home improvement tasks. At the same time, the contract sector is now suffering from the uncertainty in business confidence, particularly in the commercial office and retail sectors.

Laminate, the largest product category in this sector, continues to be a strong driver of growth in the overall wood floorcoverings market and it has become an increasingly popular choice in the commercial/contract sector. Value added products with useful additional features, such as non-slip and water-resistant or waterproof flooring, have also helped stimulate demand. Sales of laminate are likely to continue to grow by an additional 2% in 2017.

The solid and engineered woods sector has been slightly more volatile than laminate, and has seen slowing growth of 1% in 2016 with similar growth estimated for 2017, while the market for accessories, such as underlay, edging strips, glues, jointing strips, is not forecast to grow significantly in 2017.

The rationalisation of production facilities away from the UK to lower cost countries by larger global players has been a critical factor in the increasing role of imports to the UK market. The percentage share of imports from the EU has risen significantly, from 45% in 2011 to 56% in 2016, while imports from Asia have fallen from 51% to 41% in that period.

Jane Tarver of AMA Research commented:

“The wood floorcoverings sector is forecast to show annual gains of around 2-3% in the period to 2021. Forecasting is difficult at present, with the Sterling exchange rates likely to have more impact into the medium-term than has previously been the case. Increased import costs will have a greater impact on margins and many suppliers may be forced to pass on these increased costs. However, value growth is also likely to be stimulated by increase demand for FSC and PEFC certified timbers as environmental considerations become more prominent in the specification process.”.

The housebuilding sector of the construction industry is a key driver of demand for wood floorcoverings and current forecasts indicate more modest annual rates of growth for completions of 2-5% between 2017 and 2021. The medium-term outlook for the non-residential sector is for only modest improvement to 2018, followed by annual growth rates of 2-3% to 2021, based on indications of slowing growth rates for new orders throughout 2016, together with an element of uncertainty that is affecting business confidence and investment levels.

The ‘Wood and Laminate Floorcoverings Market Report – UK 2017-2021 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.

Mechanical & Electrical Contractors Market - 5 Key Facts

• The market for mechanical and electrical (M&E) contracting has grown by almost 24% since 2012. 
• The largest sectors for M&E contracting work is offices, with an estimated 25% of the market by value.
• London and the South East of England had the largest proportion of M&E contracting activity in 2016, accounting for 29% of the total. 
• Electrical work accounts for 50% of all the work undertaken by M&E contractors. 
• There are essentially four tiers of the market, with around 68% of revenue generated by smaller local and regional contractors with a turnover of up to £20m, and just 8% by the leading 5 organisations.

These facts have been extracted from AMA Research's 'Mechanical and Electrical Contractors Market Report - UK 2017-2021 Analysis' available for purchase now. 

Consolidation to continue in the UK construction contracting industry

The construction contracting industry has experienced good growth since 2013, as a result of relatively buoyant construction activity across several end-use sectors. In particular, the infrastructure, commercial office, education and entertainment sectors have performed well in recent years, with infrastructure projects accounting for over 40% of the value of contracts awarded in 2016. More recently, however, the number and value of contract awards have been lower than in 2015, indicating a slowdown.

Despite the growth in recent years, the contracting industry is facing a number of challenges, including significant labour shortages, in particular with regards to skilled tradesmen, across all areas of the country. In addition, the impact of Brexit on the construction industry is expected to be most significant on the long-term supply of capital and labour into the UK, and potential changes to immigration policy could widen the supply gap in the labour market.

The leading UK contractors in terms of turnover are Balfour Beatty, Kier, Skanska, Multiplex, Willmott Dixon, Carillion and Galliford Try, Morgan Sindall and Laing O’Rourke. Together, the top 30 contracting firms accounted for over a third of the total work awarded to contractors in 2016/17.

Contractor margins remain under significant pressure in 2017 as a result of rising material costs and wage inflation, and this has led to some restructuring in the industry. In addition, the fall in the value of Sterling has meant that UK firms have become more attractive to overseas firms, especially where there is a long-term pipeline of major infrastructure work, and in recent years there has been significant consolidation activity in the sector.

There is a growing political and economic uncertainty concerning the EU withdrawal and contracting firms currently remain cautious about future workloads. With competition for construction work now stronger than ever and large-scale construction contracts now few and far between, main contractors have been considering lower value contracts in a bid to maintain workloads. This has led to intense competition also with smaller, regional companies competing for small and medium sized contracts.

Hayley Thornley, Research Manager at AMA Research, commented:

“Going forward, growth in the contacting industry is likely to be underpinned by opportunities in large-scale infrastructure, public sector and private residential work, as new private commercial sectors suffer a slight slowdown. Major construction contracts are increasing in size and complexity, and by 2021 the construction industry is expected to have undergone significant consolidation - driven by the larger UK players as well as interest from overseas firms - resulting in several larger multidisciplinary players with the necessary scale to handle larger and more complex projects“.

Many end use sectors are expected to support growth with positive outlook in sectors such as infrastructure, entertainment & leisure and the health sector. However, this will be partially offset by the more subdued performance from sectors such as retail, which may suffer from reduced consumer confidence levels, along with lower output in commercial offices and education. The market is also expected to be impacted by the increasing economic and political uncertainty surrounding Brexit.

The ‘Construction Contractors Market Report – Focus on Sector Capability and Strategy - UK 2017-2021 Analysis’ report is published by AMA Research, a leading provider of market research and consultancy services with over 25 years’ experience in 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.

Online sales of electrical products in the UK worth £1.3bn

In 2017, the market for online distribution of electrical products was estimated to be worth £1.3 billion, having grown by almost 300% on 2012, according to a new report recently published by AMA Research. This can be compared to growth of 20% within the overall electrical products market over the same period. Online sales are now estimated to account for around 8% of the overall electrical products distribution market.

This significant growth can be attributed to the fact that leading wholesalers, as well as both trade and DIY distributors, have expanded their internet presence in recent years, launching transactional websites and starting to move towards ‘omni-channel’ services. The increasing use of click and collect has also made a significant difference to the way contractors purchase, allowing them to combine the convenience of on-site ordering with collection from a convenient store at a convenient time.

The largest distribution channels with regards to sales of electrical products are direct from manufacturers and via electrical wholesalers, while merchants and other trade distributors, such as HVAC specialists, are also significant in this market. In terms of online sales, the most significant distributors of online sales are ‘internet only’ distributors, with around 42% of the market.

Internet retailers’ development of strong online sales platforms has allowed them to gain strength, in lighting and appliances in particular. While trade channels such as merchants and home improvement retailers have made progress in terms of their online presence, their limited involvement in the electrical products market restricts their market share within this sector.

The share of online distribution currently remain hampered within the electrical wholesalers channel, as a number of significant players still lack transactional websites. However, the larger wholesalers have been expanding and developing their online offering, and there is substantial potential for growth, in particular with regards to the ‘click and collect’ segment given the extensive branch networks of electrical wholesalers.

In general, the distribution market for electrical products is starting to move towards ‘omni-channel’ distribution, whereby customers can access information, goods and services via multiple platforms and channels within one transaction, with a focus on the overall customer experience.

 “Going forward, the market for electrical products sold online is expected to continue to outperform the electrical products market and is forecast to increase by 57% between 2017 and 2021” said Fiona Watts of AMA Research.

“Growth is likely to remain strong, although limited by the lack of growth in the electrical products market overall, caused by stagnation in construction due to uncertainty in the overall economy.”

Online sales of electrical products may remain limited in certain product sectors, such as electrical accessories, where items are low value, commodity products and distributors hold a constant, high stock level, providing less benefit to pre-ordering. Specialist sectors, such as fire or automation, where direct ordering is more prevalent, may also have more limited online potential.

One of the key drivers for growth of the online channel in recent years has been the emergence of distributors with a strong online presence and catalogue in combination with a trade counter, such as Screwfix, as well as the widening of product ranges by large internet retailers such as Amazon and ebay. They offer quick delivery and transparent pricing, as well as an online browsing of the full product range, providing electricians with a convenient alternative to using the electrical wholesalers.

The traditional buying patterns of contractors appear to be shifting as click and collect becomes more widely accessible. An increasing number of electrical contractors now use mobile technology such as smart phones and tablets whilst on site in order to do product research, check product availability, locate nearby stores and check product prices, and indicates that click & collect and online ordering via mobile technology has much more potential for growth.

The ‘Electrical Products Distribution Market Report - Online Focus - UK 2017-2021 Analysis’ report is published by AMA Research, a leading provider of market research and consultancy services with over 25 years’ experience in 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.

Office and Home Office Furniture Market - 5 Key Facts

• By 2021, the market for office and home office furniture is forecast to show steady growth and increase by 11%.
• The share of the market held by the leading five suppliers fell steadily from 35% in 2014 to 32% in 2016.
• In 2016 the seating market accounted for 33% of market value, gaining share from desking.
• Imports are a significant factor in the market, reaching £288.9m in 2016, compared to £270.5m in 2015, and account for around 35% of the market.
• The two main distribution channels for office furniture are via the dealer network or directly to end users, with 45% and 24% shares respectively.

These facts have been extracted from AMA Research's 'Office and Home Office Furniture Market Report – UK 2017-2021 Analysis' available for purchase now. 

Good growth in the modular floorcoverings sector underpinned by greater integration of flooring products

Higher confidence levels in the private commercial sector has been a key driver for growth for the modular floorcoverings market in 2016-17 according to a new report by AMA Research. Growth of 4% in 2016 and a similar rate expected for 2017 has meant that modular floorcoverings have performed better than the wider total floorcoverings market. Encompassing carpet tile, vinyl tile, floor tiles, including ceramic, porcelain and natural stone tiles, and other niche products, the market is highly competitive and increasingly price sensitive.

The trend for integrating different flooring materials within a single installation has also driven uptake of modular flooring products, and the popularity of LVT in both the domestic and contract sectors remains a key factor driving both sector growth and trends in the market. Although modular floorcoverings products are utilised in both the domestic and contract end-use sectors, the contract sector holds largest share estimated at around 65% in 2016-17. However, a key trend in recent years has been the increased uptake of some products, such as LVT and porcelain floor tiles within the domestic sector.

Carpet tiles account for the largest value share of the market, estimated at around 37% in 2016-17, with sales having followed a broadly positive path since 2012. Demand for carpet tiles has been underpinned by growth for key end-use sectors such as commercial offices and education, although are indications that sales of carpet tiles in 2017 have fallen below expected levels. The sector is also characterised by continued downward pressure on prices.

The vinyl tile sector has benefited from increased demand for luxury vinyl tiles (LVT) in recent years and LVT continues to outperform the wider modular floorcoverings market, and is also a key driver of demand in the modular flooring sector. Sales of modular vinyl products continued to strengthen 2016-17, with demand underpinned by the contract sector as well as a buoyant demand from the domestic sector. Market values are, however, being constrained by high levels of competition and significant downward pressure on prices, which is also impacting suppliers’ margins.

The floor tiles market, which includes ceramic, porcelain, natural stone, glass, cement, etc, saw value growth of 3% in 2016 and is forecast to achieve a similar growth rate in 2017. This upturn has been the result of a strong recovery in both housing and commercial construction. Demand for floor tiles in the UK is underpinned by positive performance in the kitchen and bathroom sectors, the result of a buoyant housing market and higher levels of consumer confidence and spending.

Demand for natural stone floor coverings has been boosted by the popularity of natural materials in the home and the trend for using neutrals and earth shades – particularly greys, in both kitchens and bathrooms. Stone flooring also has high eco-credentials, an increasingly important consideration for specifiers. However, all the products in this category have faced increasing competition from alternative smooth flooring types, in particular laminate and luxury vinyl tile (LVT).

“Prospects for the UK modular floorcoverings market are for continued growth in the short to medium term, although the rate of growth is expected to slow slightly in 2017 and may decline even further from around 2019-21” said Jane Tarver of AMA Research,

“Sustained demand from the contract sector is likely to underpin the market into the medium-term, however the level of competition between products is likely to increase and price competition is likely to intensify”.

One of the key factors likely to affect medium to longer-term prospects remains the position of the UK in the post-Brexit world. Exchange rate fluctuations due to the lower value of Sterling against both the Euro and the US Dollar are already beginning to have an impact on prices for some products with the modular floorcoverings market having significant import penetration rates particularly for carpet tiles, LVT and floor tiles.

The ‘Modular Floorcoverings Market Report – UK 2017-2021 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.

Technology and sustainability key drivers of the UK Contract Cleaning market

Following three years of marginal growth, the UK contract cleaning market accelerated between 2014 and 2016 in line with the economy. Uncertainty caused by factors such as Brexit mean that this market growth is unlikely to be sustained over the next few years. Looking forward, demand is likely to be relatively buoyant in the transport sector, while the retail, commercial offices and the government sectors are likely to provide fewer opportunities, at least in the short term.

Contract cleaning is a mature market covering both single and multi-service contracts, in the commercial, manufacturing, healthcare, retail, transport, local authority and central government sectors. There has been an underlying trend towards greater levels of outsourcing over the last decade which has driven demand for the contracting out of cleaning services. Cleaning and hygiene services often form part of a total facilities management contract, typically comprising around 12-15% of the contract value.     

Despite over 40,000 businesses operating in the cleaning industry, the market for contractors is dominated by a relatively small number of large IFS/IFM and multi service providers and large and medium sized specialist cleaning contractors. There is also a significant franchise sector in the market, as cleaning remains one of the most popular franchise opportunities, offering a relatively low-cost investment, in a robust market with relatively few barriers to entry.

Fiona Watts of AMA Research said: ”Cleaning is one of the most competitive of all contracted-out sectors, and profit margins are under significant pressure due to rising labour costs and increasing raw material and equipment costs. In addition, there is pressure on the cleaning industry to improve standards, particularly in the healthcare sector, while also increasing efficiency.”

The drive towards more sustainable cleaning practices has become an important issue within the industry, with clients demanding more sustainable practices from contract cleaning companies.

The market is also embracing the use of technology, which is driving advances in performance and efficiency. For example, the first fully automated robotic floor cleaning machines have been launched in the UK and robots using UV lights to kill the DNA of bugs have been trialled in the NHS to help fight HCAI’s. Other technological developments include increased connectivity, which allows contractors to digitise cleaning procedures using sensors, gather and analyse real-time data to help them work smarter, create efficiencies and raise standards. Technology is expected to become ever more present within the industry over the coming years.

Looking forward, moderate growth is expected to continue within the contract cleaning market with a mix of negative and positive factors impacting the market. The demand for bundled service and Total Facilities Management contracts will continue to be a strong driving force as public and private sectors look to maximise value from contracts. However, there is concern that the Brexit decision may have an impact on the labour market and, with labour costs accounting for an estimated 80% of any invoice within the contract cleaning market, changes such as an increase to the National Minimum Wage have a significant impact on the health of the sector.

The transport sector is forecast to show good growth, driven by the expanding UK aviation and rail infrastructure and growing passenger numbers, something which should have a positive impact on the contract cleaning industry. Demand in many sectors are expected to decline in the coming years, such as the retail sector and the commercial office sector where reduced development activity will limit new contract cleaning opportunities in the short term.

The ‘Contract Cleaning Market Report – UK 2017-2021 Analysis’ report is published by AMA Research, a leading provider of market research and consultancy services with over 25 years’ experience in 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.

Construction Chemicals Market - 5 Key Facts

• The market for Building and Construction Chemicals was estimated to have grown by 20% since 2012. 
• It is estimated that resin flooring systems typically account for approximately 8 million m² of area laid down per annum.
• Around half of the concrete, cement & mortars admixtures are used in the ready mixed concrete sector. 
• Silicone sealants account for around half the UK market for specialist sealants by Volume.
• Floor & wall tile adhesives & grouts constitute the largest sector of the market for adhesives, estimated at 33%. 

These facts have been extracted from AMA Research's 'Construction Chemicals Market Report - UK 2017-2021 Analysis' available for purchase now. 

Domestic Garden Landscaping Materials Market - 5 Key Facts

• The market for domestic landscaping materials has grown by 16% between 2012 and 2016, benefiting from increased spending as consumers seek to enhance outdoor areas.
• Low maintenance is a key trend with products such as artificial grass, paving and decorative aggregates all benefitting.
• High import penetration levels mean that the market remains vulnerable to the possibilities of price inflation when Sterling exchange rates decrease.
• Online sales have become increasingly important with the increased penetration of specialist e-tailers but also the increasing adoption of the ‘omni-channel’ approach by the more traditional retail channels.
• Forecasts indicate steady, if modest, growth to 2021 but with the market remaining susceptible to the vagaries of the British weather and the level of consumer spending on non-essentials.

These facts have been extracted from AMA Research's 'Domestic Garden Landscaping Materials Market Report - UK 2017-2021 Analysis' available for purchase now. 

Modest growth forecast in the UK building insulation market

The market for building insulation products in the UK has been fairly flat over the last couple of years following substantial volatility in the preceding years. The fall in government subsidised retrofitted installation activity drove some of the decline in the market in 2015 for example. Although there was a growth in demand for insulation products from increasing levels of newbuild housing and in non-domestic building, the total market fell by around 2% in 2015, before recovering in 2016, as construction output and housebuilding levels continued to rise. Forecast growth will be subject to any further Government subsidies, though growth rates are forecast to be modest over the next 2-3 years.

Key market influences include changes to building regulations, such as the amendments to Part L in 2013, and energy prices. Government subsidy schemes also drive growth in the domestic market, however, domestic installations have been at a significantly lower level since the Green Deal was scrapped in 2015 and the funding to deliver the Energy Company Obligation (ECO)was reduced.

PUR / PIR products now have the largest market share in the insulation products market, accounting for around 40% by value in 2016. That said the current shortage in PUR raw materials may well result in share shifting away from this sector in the short-term future.  The market value of mineral wool products has fallen due to the fall in demand for such products under the Green Deal and ECO, but they still account for a significant share of the UK market. Although installations have fallen in recent years, domestic retrofit remains an important market sector in the building insulation market, with cavity walls and lofts key application areas.

The key supply route for insulation products is the specialist (interiors) distributor channel. Builders merchants account for just below 20% of the market, the remainder being split between direct sales to installers, direct sales to external wall insulation systems companies, converters and DIY stores. The installation market for insulation is polarised between a small number of national companies and many regional and local independent firms, with the leading contractors typically provide additional energy efficiency services.

Keith Taylor, Director of AMA Research commented: “Looking forward, the market for building insulation products is likely to be comparatively less volatile, though a modest decline is forecast for 2017. Overall, modest growth of 1-2% per year is expected over the next few years, in value terms."

Key trends over the next few years include; a decline in output for key non-domestic construction sectors, slower growth in new housebuilding compared to 2016, limitations in Government funding and new schemes to support installation, reduced levels of consumer and business confidence due to uncertainty regarding the EU exit situation.

That said, the potential for growth through retrofitted insulation to Britain’s existing housing stock is substantial, with an estimated ~7.8 million uninsulated dwellings with solid walls, and significant numbers of lofts and uninsulated cavity walls. In addition, there is also a substantial area of non-domestic flat roofs that have no or inadequate insulation.

Added value solutions will also potentially add substance to the market, with the introduction and growth of certain products with claimed high thermal insulation values creating growth in some sectors. There may be an impact from the increased awareness of fire retardancy properties amongst building products and materials.

Although industrial energy costs have fallen recently, over the longer-term energy prices are forecast to rise, which is likely to result in higher end-product prices for insulation products, something that may be exacerbated by the falling value of the pound, leading to increased import prices for many materials.

The ‘Building Insulation Products Market Report – UK 2017-2021 Analysis’ report is published by AMA Research, a leading provider of market research and consultancy services with over 25 years’ experience in 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 commercial and industrial doors market regains pre-recession level

The commercial and industrial doors market increased by an estimated 3% in 2016, following 4% growth in 2015, though there are indications that the growth rate is slowing in 2017. Key factors underpinning growth in the market have included the increase in private commercial and industrial newbuild and non-residential RMI since 2012. While the market for industrial doors regained their pre-recession level in 2016, commercial and personnel access doors remain nearly 7% below its 2008 peak.

Sub-sectors within manufacturing such as transport, aviation and food production, have helped sustain construction demand for a variety of door products - from high insulated systems for refrigerated units, to large transport warehouse industrial doors. The chemicals and pharmaceuticals sectors also require very high-quality door systems and materials including high value specialised hygienic products developed for use in these industries. Changes to building regulations and increased requirements in terms of security, as well as sustainability issues, have also helped to assist market growth with increasing emphasis placed on higher-quality products.

The market for personnel doors is directly related to commercial and industrial new build and RMI demand, which declined between 2008 and 2012, but has seen continuous annual growth since 2013. In overall terms, the industrial doors market has demonstrated erratic trends at times with demand sometimes bucking an otherwise falling economic trend with rising demand. More importantly, an underlying steady level of servicing and maintenance expenditure has also contributed towards smoothing out demand.

Jane Tarver of AMA Research commented: “The market outlook for commercial and industrial doors over the next few years is positive, but forecasts indicate only modest growth in the short-medium term, based on a slowing trend of new construction orders and the uncertainty affecting business confidence and investment levels as a result of the Brexit process.”

Short-medium term prospects in construction activity in 2017/18 have gone from modestly optimistic to ‘relatively cautious’, with variations between construction sectors. Modest growth is currently forecast in the leisure and industrial sectors but with the commercial offices and retail sectors forecast to show short-term decline as they come under pressure reflecting reduced confidence and investment levels.

Given the above background, the forecasts are that the commercial and industrial doors and shutters sector will show low to modest annual growth from 2016-21, with only 6% overall value growth currently forecast 2016-2021.

Demand will continue to focus on automated systems, more energy saving and security door systems, and for sustained RMI work across sectors leading to some market growth in the replacement market, while new build volumes for both personnel access doors and industrial doors will see lower rates of growth. Product innovations and increased security and insulation properties for both personnel access and industrial doors are also likely to be key factors underpinning market value into the medium-term.

The ‘Commercial and Industrial Doors and Shutters Market Report – UK 2017-2021 Analysis’ report is published by AMA Research, a leading provider of market research and consultancy services with over 25 years’ experience in 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.

Domestic Kitchen Furniture Market Report 2017-2021 - 5 Key Facts

• The kitchen furniture market comprises furniture, worktops and sinks, with furniture accounting for 79% of the market in value terms.
• The kitchen furniture market is at the mature stage of its product lifecycle, with replacement sales accounting for almost 80% of sales.
• Imports currently account for less than 7% of the kitchen furniture market (excluding worktops and sinks), with Germany and Italy being the major sources.
• The worktops market is forecast to show good growth in the period to 2021, with share increasing to 13% of the total market.
• The top 3 suppliers account for around 59% of the kitchen furniture market.

These facts have been extracted from AMA Research's 'Domestic Kitchen Furniture Market Report - UK 2017-2021 Analysis' available for purchase now. 

UK Construction Equipment Rental market set to exceed pre-recession value by 2019

The UK’s construction equipment rental market is forecast to be worth over £4.7bn in 2019, exceeding its peak value reached in 2007. Growth in this market has been continuous since 2011, at a level of 3-4% per year. The primary driver for growth is the performance of particular end-use sectors, with hire of planers, pavers and rollers depending on the level of highway repair activity, and forklift hire on the level of distribution & warehouse activity, while the weather can have an impact on the level of hire of pumping and climate control equipment, for example.

Although growth has tended to remain steady, the market performed particularly strongly in 2014 when it increased by around 8%, driven by a higher demand in housebuilding, among other factors. Overall infrastructure remains the key end-use sector, although certain parts of the infrastructure sector have performed differently in recent years; the rail sector, for example, has been declining in recent years, whilst the utilities sector – in particular electricity - has performed well. Other key end-use sectors include housebuilding, offices, education and industrial, while major non-construction sectors include manufacturing, waste management and events.

In terms of equipment categories, earth moving equipment represents the largest sector, accounting for around 22% of equipment hire value. Other key sectors include lifting, access equipment, skips & rubbish chutes, portable buildings & environmental control and hand & power tools.

The construction equipment rental market is highly competitive, which can impact hire rates. The upturn in demand in 2013 and 2014 in particular saw some hirers start to increase rates, however, the trading conditions in 2015/16 have seen prices become more stable. The market is relatively fragmented, reflecting the high number of specialist operators with different competitors in different hire product sectors, though this fragmentation is set to reduce going forward, with acquisition activity increasing.

The level of hire is also dependent on companies opting to hire rather than buy. Many companies choose to hire plant and tools, generally to avoid risks such as capital investment risks, operating risks and legislative/compliance risks, but hiring construction equipment also provides other benefits, such as use of the latest machinery, which can lead to improved productivity levels and higher standards. Additionally, machinery repair and maintenance costs are borne by the hire company and not the owner/contractor.

Trends within the construction industry are likely to impact on different sectors of the hire market. One trend likely to benefit the market is the expected switch back in favour of flats rather than houses, which is likely to benefit some hire sectors such as some primary construction equipment needed for the construction of multi-story apartments. However, the underlying long-term growth in off-site manufacturing (OSM) will tend to erode on-site hire requirements. Additional hire demand will be achieved from non-construction sectors such as manufacturing, events and recycling/waste management.

“From 2018 onwards, construction sub-sectors forecast to increase output include infrastructure, entertainment & leisure, industrial and health, as well as housebuilding, while sectors such as education, offices and retail are not forecast to experience growth in the short term” said Keith Taylor, Director of AMA Research. “The biggest risk factor in the forecast will be the effect of the ‘Brexit’ negotiations on the levels of business confidence and investment, which in turn will impact on the construction industry.”

The ‘Construction Equipment Rental Market Report – UK 2017-2021 Analysis’ report is published by AMA Research, a leading provider of market research and consultancy services with over 25 years’ experience in 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.

Modest growth forecast for UK Powered Access Equipment Hire

The UK powered access equipment hire market - which consists of a range of mobile elevating work platforms (MEWPs) including scissor, boom and spider lifts, vertical masts and vehicle and trailer mounted lifts - saw an increase of 2% in 2016 in value terms, with a further 2% average annual growth forecast for the next 5 years. The powered access hire market is influenced by the health of key end-use sectors, principally new build construction and infrastructure, but also other sectors such as manufacturing, warehousing and the events industry.

Whilst the hire of powered access equipment forms part of the wider plant and tool hire market, it is dominated by specialist access equipment hire companies, who make up a majority share of the total hire market revenue in the UK, with only 25 – 30% being accounted for by more generalist plant and tool hire companies.

Between 2012 and 2016, the UK powered access equipment hire market saw reasonable growth, sustained by the buoyancy of the construction market and by the recovery in manufacturing industry, and the market also benefitted from growth in other sectors including warehousing, telecoms and events. However, growth has been inhibited by a persistent tendency for oversupply, with new companies entering the market and existing companies expanding their fleets, leading to downward pressure on rental rates. 

While scissor lifts dominate the hire market in volume terms, representing nearly half of the total fleet, boom lifts are clearly the largest product segment by value. The mix of product types in the powered access hire market has changed somewhat in recent years with demand for low level access products, including small scissor lifts and vertical masts, growing more strongly than medium height access products, driven by the shift from non-powered to powered access in this segment of the market. The market has also seen a significant expansion in the number of spider lifts in the UK fleet.

Hayley Thornley, Market Research Manager at AMA Research said: “Legislation is an important driver of fleet renewal, and the current legislation changes in the area of engine emissions is leading to an increased focus on electric and hybrid-powered equipment among powered access equipment hire companies. Recent product developments that have added value to the powered access equipment hire market have been centered around the area of telematics, in order to improve safety and to improve equipment efficiency.”

There has been some consolidation in the industry in the last few years as leading companies have sought to strengthen their market penetration through acquisition, and the market has also seen the loss of Hewden, a major player in the hire market. The powered access hire market now has a relatively high level of concentration, with the top 3 companies accounting for around a third of the overall market. 

Prospects for the construction industry, which remains the key influence on the powered access equipment hire market, is for low level growth in the medium term, and a similar trend is forecast for the powered access equipment hire market, which is expected to see growth of 1-3% per annum until 2021. Infrastructure construction is likely to be a key driver of demand, with the government being committed to over £100 billion worth of investment under its National Infrastructure Delivery Plan.

However, prospects for private commercial and industrial construction are less positive and vulnerable to economic uncertainties. The Brexit decision has already led to a market decline in the value of sterling which, as most powered access equipment is manufactured outside the UK, is leading to higher new equipment costs in the short term. Given the continuing issue of oversupply and depressed rental rates, hire companies may find it difficult to pass these higher costs on to customers.

The ‘Powered Access Equipment Market Report – UK 2017-2021 Analysis’ report is published by AMA Research, a leading provider of market research and consultancy services with over 25 years’ experience in 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.

Construction Contractors Market Report - UK 2017-2021 - 5 Key Facts

• The aggregate turnover of the UK's 30 biggest construction firms (Tier 1 firms), reached around £53.3bn in 2016-17.
• London was the most significant area in terms of contracts awarded in 2016, with the total value of contracts awarded reaching around £14.5bn for the year.
• With significant infrastructure projects planned, the North West is also a key region for contractors, with the value of contracts in 2016 worth around £7.9bn (11% of total UK contracts).
• In terms of construction supply, two thirds of the top 30 contractors are engaged in University construction.
• Commercial offices have experienced the highest level of construction output growth in 2015 and 2016, increasing by 33% to £11.9bn.

These facts have been extracted from AMA Research's 'Construction Contractors Market Report – Focus on Sector Capability and Strategy - UK 2017-2021 Analysis' available for purchase now. 

Ventilation and Air Conditioning Market Report - UK 2017-2021 - 5 Key Facts

• The UK ventilation and air conditioning market is significant, with an estimated total value of over £1.1 billion at manufacturers selling prices (MSP) in 2016.
• Residential ventilation products have around 44% share by value and include intermittent extract fans and mechanical ventilation systems.
• The leading seven suppliers account for a total of around 66% of the market.
• PAC systems are estimated to account for around 60% share of the UK air conditioning market, while central station systems account for the balance.
• Cassettes, split systems and mini-split systems are estimated to account for over 85% of PAC sales in the UK. 

These facts have been extracted from AMA Research's 'Ventilation and Air Conditioning Market Report - UK 2017-2021 Analysis' available for purchase now. 

Water Heating Market Report 2017-2021 - 5 Key Facts

• The UK water heating market is forecast to grow by around 10% by 2021.
• The boiling water heater and taps sector is expected to grow by 27% over the same period.
• Electrical wholesalers account for around 12% of hot water storage product distribution in 2016.
• The top 4 hot water storage product suppliers accounted for 60% of the market in 2016.
• Vented cylinders only account for around a fifth of all cylinders sold in 2016 by volume. 

These facts have been extracted from AMA Research's 'Water Heating Market Report - UK 2017-2021 Analysis' available for purchase now. 

Healthcare Construction Market Report - UK 2017-2021 - 5 Key Facts

• Healthcare sector construction output peaked at £5.9bn in 2008, falling through to 2016 to reach £3.1bn.
• NHS Total Capital Spending is expected to increase by 18% between 2015/16 and 2020/21.
• The total size of the NHS estate in 2016 was estimated at 26.8 million square metres.
• The independent medical / surgical hospitals sector is a more mature segment within the UK independent healthcare market, where the top 5 providers control around 81% of the market, in terms of numbers of bed-spaces.
• Procure22 commenced on 1st October 2016 and will run for a maximum of 4 years with an expected annual value of between £650m and £750m.

These facts have been extracted from AMA Research's 'Healthcare Construction Market Report - UK 2017-2021 Analysis' available for purchase now. 

10% growth in the UK Commercial Washrooms Market in 2016

The UK commercial washrooms market is estimated to be have increased by 10% between 2015 and 2016, according to a report by AMA Research. This growth is largely due to a strong performance across several key sectors of the non-domestic construction industry including entertainment, offices, education and health. It is anticipated that the value of the commercial washrooms market will continue to rise, initially influenced by the rising cost of imports, given the weakness of sterling, and a stronger economic climate towards the end of the forecast period.

By product sector, washroom panel systems represent the largest category, accounting for around 40% of the commercial washrooms systems market value. Sanitaryware also account for a significant share, while overall sales of brassware, showers/mixers and baths are lower in value terms.

It is estimated that just under three quarters of commercial washroom products are distributed via trade channels, including builders/plumbers’ merchants and distributors. Direct sales to end users and dedicated online channels represent the remainder, with internet sales seeing stronger than average growth in recent years. Branded goods from leading manufacturers continue to perform strongly and are used within the commercial washrooms market as a perceived endorsement of quality, particularly in premises such as hotel chains and corporate premises. However, non-branded OEM products remain a cost effective option at the more price conscious end of the market.

In terms of trends, streamlined contemporary designs remain popular, driven by aesthetics, ease of cleaning and perceived improvements to hygiene. Safety is also a key consideration within the washroom sector, with products such as floor level showers, non-slip surfaces and low-level door sills seeing growth. Natural finishes incorporating real stone or wood are popular. More authentic and expensive materials tend to be used in the private corporate or upmarket hotel sector, where budgets allow.

In the commercial brassware and showers/mixers sectors, the need to conserve water has been a key feature in product design for a while, resulting in sensor activated taps and precision targeting of flow. Mixer taps continue to gain popularity and thermostatic controls have become the safety standard to prevent scalding, while thermostatically controlled mixers are now more mainstream in the shower sector. Smart technology and digital features, including touch free controls, movement sensors, automatic flushing and regulated temperature controls, have become more prevalent in the design of modern washrooms.

In terms of specification and installation, there is a trend towards specifying complete washroom solutions, encompassing all elements from ‘concept to completion’ in one integrated scheme for schools, offices and hospitals, for example. A requirement for quick installation has supported the wider use of pre-fabricated panels and systems, while shower and bathroom pods are widely used in the budget hotel and student accommodation sectors.

Hayley Thornley, Research Manager at AMA Research, commented: “The commercial washrooms market is expected to grow by a further 15% between 2017 and 2021, representing lower annual growth rates than in 2015/16. Growth will be supported by rising prices and underlying demand in sectors such as health and education, particularly for RMI work, with the outlook more positive towards the end of the forecast period, when the economic and political situation is expected to be more stable”.