Construction Equipment Rental Market - 5 Key Facts

• The market grew 7% from 2014 due to improvements in both housing and non-domestic building markets as well as manufacturing and other non-construction end-use sectors.
• Earth moving equipment represents the largest equipment sector, accounting for around 22% of hire value.
• The top 12 companies account for around 45% of the market. 
• Powered access dominates the hire market for access equipment sector, accounting for an estimated 69% share.
• The key hire market for gardening and landscaping equipment are cultivators & rotavators with 22%, hedge trimmers/ strimmers/ brush cutters and chippers & shredders (19%).

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

Growth decelerates in the commercial glazing market as commercial construction slows

Following good growth in 2015-16, the UK market for commercial glazing has been less buoyant in 2017 as the private commercial sector reacted to the climate of uncertainty surrounding the Brexit process. This resulted in only marginal growth, at best, for 2017.  The commercial glazing sector is particularly reliant on the offices and retail sectors which have both seen reductions in new order values in 2016-17 as expansion and investment plans for some organisations have been deferred. Current forecasts indicate that the market is likely to flatten in 2018-19, followed by modest annual growth rates of around 2-3% to 2021.

Within the commercial glazing market, the largest segment by value is commercial windows, with an estimated share of 56%, followed by curtain wall and ground floor treatments, while roof glazing accounts for the smallest share. The level of demand for ground floor treatments has been affected by structural changes within the retail sector towards online shopping and ‘click and collect’ services, whilst the trend for the grocery multiples to build ‘express’ type outlets has also affected the average value of contracts. In terms of frame materials, aluminium dominates but timber, PVCu, steel and composites all have reasonable shares and sector strengths.

Following the higher levels reached in 2016, the market is estimated to show marginal growth in 2017 with no real growth 2018-19. Trends follow those in key construction markets with office, retail and education construction forecast to weaken during this period.

Jane Tarver of AMA Research commented: “Commercial glazing suppliers will continue to derive gains from RMI particularly in those sectors showing lower annual growth in new construction work, such as education and healthcare. Increasing average prices are likely to be a characteristic of the market into the medium-term which will result in some value growth, but with the volume of commercial glazing opportunities likely to decline”.

Key to the medium-term prospects for the commercial glazing market in the UK are the levels of business confidence and investment, which remain uncertain at present and will depend on the outcome of the Brexit negotiation process. In addition, the strength of the private commercial sector construction output will be key, with some regions benefitting from a strong pipeline of work, eg London and the South East, but with other regions likely to be less buoyant.

The issue of pricing will also be affected the performance of Sterling on the foreign exchange markets since the UK is a significant importer of some glazing systems, as well as being a key market for leading non-UK based contractors.

The ‘Commercial Glazing 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.

The UK health and education facilities management market declined by 2% in 2017

Over the last few years, the potential for growth in facilities management (FM) outsourcing within the healthcare and education sectors has been limited, largely due to factors such as political and economic uncertainty, cuts in public sector budgets and closure of a number of facilities. Growth within the market for outsourced integrated services and TFM in health and education has therefore been on the modest side. In 2017, the market was estimated to be worth £3.2bn – around 2% lower than in the previous year.

FM market growth has also been hampered by a decline in the number of large-scale projects undertaken. Although healthcare and education represent two of the largest Government departments in terms of PFI/PF2 activity, the number of schemes being signed off on a year-by-year basis is declining due in part to the difficulty in obtaining finance.

In both the healthcare and education sectors there has been a gradual trend towards bundled service and TFM contracts, largely at the expense of single-service varieties. That said, single service contracts remain prevalent within certain market sectors, such as catering in primary and secondary schools. The growing adoption of bundled and TFM contracts has had a positive effect on market value, since these tend to be higher priced. However, the reduction in the number of PFI projects, together with greater contract renegotiation, has limited growth within the TFM sector in the hospital sector.

Healthcare represents the larger of the two sectors covered by this report, although the sector is mature and has declined 3% within the last year. The sector has been impacted by pressure to minimise operational costs to protect frontline services, as well as ongoing rationalisation of the NHS estate as under-utilised premises are sold off. Acute hospitals account for a significant percentage of outsourced FM services, with outsourcing most commonplace in areas such as community health providers and general/acute hospital care.

FM outsourcing is less well-established within the education sector. In 2017, market value saw a small decline compared to the previous year, as growth was affected by restrictions on budgets. Outsourcing of FM services within education is heavily skewed towards primary and secondary schools, which account for almost three-quarters of market value.

Building, engineering & maintenance and cleaning represent two of the most commonly outsourced FM services within the healthcare industry. Although maintenance is also dominant within the education sector, back office functions such as administrative and clerical functions, along with catering, are also widely outsourced. Energy management is likely to provide opportunities in the FM sector.

The higher-level merger and acquisition activity within the FM market appears to have stagnated, most likely due to the current political and economic uncertainty and the low margins currently obtained in the contracted-out services sector. The market’s leading players have appeared more inclined to divest businesses rather than acquire them, in order to focus on core areas of expertise. Until its collapse, Carillion was one of the leading providers of FM services to the health and education sectors.

Fiona Watts of AMA Research said: “The outlook for the FM outsourcing market within healthcare and education is considered moderately positive over the short to medium term, although growth within both sectors is likely to depend upon the prevailing political and economic situation. Government encouragement of greater private sector involvement is expected to continue, providing some optimism in the market.”

A further boost to the market should arise from the continued shift away from single service contracts towards bundled service and TFM packages. This trend is likely to have a more substantial impact within the education sector, where single-service contracts still dominate in several areas. However, budgets are likely to remain restricted for the foreseeable future, despite recent commitments from the Government to increase funding in the NHS and refurbishment of schools.

The ‘FacilitiesManagement Outsourcing - Health & Education Market Report – UK 2018-2022’ 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.

Modular Floorcoverings Market - 5 Key Facts

• Returning confidence in the private commercial sector and the continuing growth of LVT (luxury vinyl tile) has seen modular floorcoverings increase by 22% between 2012 and 2017.
• Carpet tile is the dominant sector; however, pressures from competing modular floorcoverings have muted value growth over the last 2-3 years.
• LVT continues to outperform the wider market but the sector is increasingly subject to increased competition levels and significant downward pressure on prices. 
• Imports play a significant role for the market with carpet tile, LVT/vinyl tiles and ceramic/porcelain tiles having significant import penetration levels.
• More modest annual growth rates of around 2-3% are currently forecast to 2021, reflecting the current uncertainties surrounding the Brexit process, increased competition and further pricing pressures.

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

7% overall growth forecast in the UK floor and wall tiles market until 2021

Subject as it is to the influences of consumer and business spending levels, construction output and underlying economic trends, the wall and floor tiles market delivered a strong performance between 2014 and 2017 with overall growth of 8%. However, growth rates have slowed to around 2% in 2016-17 with this more modest growth scenario likely to be a feature of the market into the medium-term. Key factors that have underpinned the market over the last 2 years have included strong demand from both contract and residential end-use sectors as well design and innovation trends that have added value to products.

The market has benefitted from returning confidence in the housing market in terms of both new housebuilding and RMI. The “improve not move” trend continues to positively influence the market with householders often trading up to higher value products particularly for floor tiles. Improving completions volumes for new housebuilding have provided opportunities for growth but the continuing trend for upstands and painted walls in kitchens for new houses has, to some extent, limited the potential growth for wall tiles. Non-domestic applications have continued to provide strong demand, including offices, entertainment & leisure, transport buildings, education and industrial.

Ceramic and porcelain tiles dominate the product mix, with natural stone accounting for around a fifth value share and the others sector accounting for the remainder. Consumer demand for durable, hardwearing and easy to maintain flooring has benefited the porcelain tiles sector in particular in recent years. A degree of polarisation is still evident at the lower end of the market where white & single coloured ceramic tiles remain popular, while in the mid-upper sectors of the market there is high demand for more decorative ceramic products as well as natural stone and stone and wood effect porcelain tiles.

Textures and design elements have become increasingly important within the market with continuing production and printing innovations allowing manufacturers to easily replicate the appearance of natural materials.  In addition, new technologies have meant that production turn-around times have been improved which has resulted in manufacturers being able to supply limited runs of higher value products aimed at the upper end of the market. Patterns and shapes remain a key element of the market with “random lay” decorative tiles for both walls and floors increasingly offered by suppliers.

The market is dominated by imports with penetration rate estimated at around 70% in 2017 with European producers dominating import supply. UK-based manufacturers are under increasing pressure and this is likely to continue as the Brexit process advances. This may result in further corporate activity such as restructuring and the moving of manufacturing bases.

“International trade is a key element of the market given the low number of UK based volume manufacturers but high levels of demand” said Jane Tarver of AMA Research.  “Sterling exchange rates are therefore likely to continue to have an impact on pricing into the medium-term as imports become more expensive. However, the ‘openness’ of the UK market to tile imports is unlikely to be reversed into the longer-term given the limited UK manufacturing base”.

Prospects for the floor and wall tile market into the medium-term remain relatively optimistic with the market forecast to grow to around by 7% between 2017 and 2021. Levels of residential RMI are forecast to increase to 2021, despite the economic uncertainty, and the trend for ‘get someone in’ - rather than DIY - is expected to continue benefiting the market.

The outlook for the non-residential construction sector is for only marginal improvement to 2018, followed by annual growth rates of 2-3% to 2021. In part, this reflects the uncertainty regarding the UK’s position post-Brexit, the reduction in business confidence and investment that are likely to affect some key sub-sectors for tiles, such as office construction.

Going forward, the floor and walls tiles market is likely to continue seeing significant competition from other surfacing materials, such as waterproof panels, including thin porcelain panels, LVT and other types of wall and floor coverings as well as the use of prefabricated bathrooms/wet room pods used in the contract sector.

The ‘Floor andWall Tiles 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.

3% growth in the UK Door and Window Fittings Market in 2017

The UK market for door and window fittings grew by around 3% in 2017. This is lower than in 2016, in line with slowing growth rates for the construction market as a whole and stimulated by greater demand for higher specification products. The door and window fittings market is closely linked to the fabrication and installation markets as well as the overall glazing industry, which is relatively mature but has seen steady growth in recent years.

Polarisation is a feature of this market and this is characterised at one end by high value, high specification products and low cost, basic product ranges at the other end – with the lower value sectors of the market experiencing significant downward pressure on average prices due to increasing import penetration.

There has been little change to the product mix for door and window fittings in recent years. Locks and handles represent the two major product sectors, together accounting for over half of the fittings market, although mechanical locks have lost some share as electronic locks have become more widespread. Door closers now account for an estimated 15%, having shown stronger than average growth.

Product development tends to be influenced by a number of factors including fashion, legislation and technical issues. Higher security standards play a significant role in product development and improvement, and there is some evidence of growing demand for automation in doors and windows which may drive development in the market going forward. Standard white hardware is declining in popularity, with finishes such as brushed chrome, brass, burnished bronze and nickel becoming more popular in the domestic sector.

In terms of supply, the UK door and window fittings market has seen a slowing of merger and acquisition activity in the last two years, following significant consolidation of suppliers in previous years, although the industry remains highly fragmented. Due to the wide range of options, styles and applications, many companies operate in just one or a few of the product sectors within this market. Imports also continue to play a significant role in the UK door and window fittings market.

“For 2018 and beyond, forecasts indicate marginal but positive growth, based on improving housing and construction markets - although growth will be constrained by price pressure and strong competition” said Fiona Watts of AMA Research.

Key drivers for growth are likely to be the trend to trade up to higher specification products, particularly those which offer added security features and are aimed at the commercial sector. Another major main driver for growth will be improving output levels in the private commercial construction sector and continued growth in the housing market.

The ‘Door andWindow Fittings Market Report – UK 2018-2022’ 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.

Roofing Market - 5 Key Facts

• The roof coverings market is estimated to be worth over £1.3bn at manufacturers' selling prices (MSP).
• Overall, the roofing market increased by 7% in 2016, though growth in 2017 has been lower.
• The largest product sectors are metal roofing systems and concrete roof tiles, which accounted for respectively 29% and 21% of the total market by value in 2016.
• In terms of distribution, the leading channel is roofing merchants and specialist distributors with a share of 50-55%, though this varies by product type.
• Forecasts for the UK roofing market are modest with growth of just 2% expected over the next 4 years.

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

Residential RMI to underpin growth in the UK Paint, Wallcoverings and Woodcare market

The market for paint, wallcoverings and woodcare products was worth an estimated £925m in 2017. An upturn in the construction sector in 2014 stimulated demand for paint and wallcoverings and the market continued to grow to 2015, underpinned by positive developments in the domestic sector. However, the market has been relatively flat since 2016. Key drivers of demand are the housing market, consumer confidence, home improvement levels, design trends, non-residential construction activity and the weather in any given year.

The paint and effects sector has grown by an estimated 8% from its low point in 2009, although has been relatively flat in recent years. Within this sector there has been a continued shift towards more water based paints, with acrylic eggshell, for example, representing a growth area. There has also been an increase in demand for value added products such as durable, stain resistant and easy-to-clean products, as well as more specialist paints, including light reflecting, textured finishes, anti-bacterial, low odour, fast drying, anti-slip floor paint and insulating paint.

In the wallcoverings sector, consumers appear to be increasingly confident in using bold designs. Larger designs with increased use of texture and digital prints are also popular - digital printing has enabled some revolutionary changes, with the availability of unlimited colour palettes and no restrictions on pattern size.

The woodcare product sector has experienced growth, benefiting from a range of factors including the impact of climate conditions & the weather, growth in key sectors such as fences, sheds, furniture & conservatories, increasing popularity of garden paint and the growing housing sector.

The DIY multiples channel accounts for the largest share of the market, with large ranges of branded and un-branded/own brand products available in the majority of outlets. However, trade centres have gained share benefiting from the growing trend to outsource decorating work to tradesmen, and the direct channel has benefited from growth in the non-domestic sector. Distribution routes are likely to be impacted by the structural changes currently occurring in the retail sector, with many distributors offering multi or omni-channel services, as well as the predicted growth in the ‘click and collect’ segment.

In terms of supply, the market is relatively concentrated and dominated by a small number of larger organisations. Imports remain a feature of the market, with the EU accounting for the majority share of imports, although the UK is a net exporter of paints.

Keith Taylor, Director of AMA Research commented:

“Market prospects in the paint and wallcoverings market remain positive, although only modest growth levels of 1-2% per year are forecast to 2022. Levels of residential RMI are forecast to increase, despite the economic uncertainty - not only are people improving their home instead of moving, but the trend to carry out improvements prior to placing properties on the market appears to be returning. The trend to ‘get someone in’ instead of doing it yourself is also expected to continue benefiting the market.”

The ‘Paint,Wallcoverings & Woodcare Market Report – UK 2018-2022’ 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.