Plumbers merchants market forecast to increase by 4% in 2016

The plumbers merchant market was worth an estimated £4bn in 2015, having recovered strongly in recent years. The market value declined during 2011/12, reaching a low point in 2012. From 2013 onwards, demand has increased leading to greater demand for plumbing materials, bathroom and shower products, and the plumbers’ merchants market is forecast to grow by around 4% in 2016.

Increasing demand has been due to the improving economic climate in general since 2013, with demand increasing for both new work and RMI activity. Output growth, which has been particularly strong during the past 2 years, was also experienced across most construction sub-sectors, including the housing and commercial sectors, such as offices, retail and entertainment and leisure.

However, price competition remains fierce and this may influence margins going forward. In order to differentiate themselves, some plumbers merchants have invested in improving the overall customer experience through enhanced service, such as extended opening times, greater availability of stock and heightened promotional activity. Many have also expanded their online presence, to ensure that they compete with rising internet sales. The growth of multi-channel merchanting, which combines physical premises with an online store, is forecast to continue.

Consolidation has been a feature of the marketplace in recent years, as nationals have acquired smaller regional operations in order to extend their reach and range of services. However, many regional and independent merchants have performed well, with some expanding their number of branches to improve their product offering and stock levels to meet local needs. This has been coupled with a focus on facilities which appeal to the public, not just the trade, such as bathroom and kitchen showrooms.

At present, the price of imported goods is increasing due to exchange rate fluctuations – something which will contribute to an uplift in market value in the short term. The issue is likely to affect a significant number of product sectors in the longer term.

It is extremely difficult to forecast the impact of the outcome of the EU Referendum on the economy going forward. Several economic forecasts suggest that the UK economy will start to slow, with business and consumer confidence affected, potentially with lower GDP growth in 2017 and 2018. The situation may improve after this, depending on the outcome of trade negotiations, both within and outside the EU, which have yet to take place.

“While there are indications of a slowdown in growth in the housing and commercial sectors from mid to late-2016, the plumbers’ merchants market is still forecast to increase by around 4% compared with 2015, with a further 2-3% per annum expected from 2017 onwards” said Keith Taylor, Director of AMA Research. “However, the market value remains below levels seen in 2007.”

Going forward, the market value is likely to increase in the short term, boosted by price increases, however, the outlook is more uncertain for the longer term. A strong demand for housing and an undersupply of homes is likely to continue to be a key driver supporting the plumbers merchant market in the medium to long term.

The ‘Plumbers Merchants Market Report – UK 2016-2020 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.

Double digit growth anticipated in the UK pharmaceutical construction sector in 2016

The level of construction output in the pharmaceutical sector has grown strongly in recent years, with a focus of developments on high-value laboratories and cleanrooms. The market  is currently buoyant and showing double digit growth, with a further 13% growth anticipated for 2016. The UK is one of the largest pharmaceutical markets in the world, and the sector makes a greater contribution to the UK economy than any other industrial sector.

Though there has been some scaling-back of R&D budgets in the UK in recent years - due to issues such as slowing R&D pipelines, dwindling R&D and healthcare budgets, rising costs, impending ‘patent cliffs’, increased regulatory controls and increased pricing pressures - pharmaceutical manufacturing investment activity in the UK has been slowly increasing over the last couple of years. It appears confidence is strong in the market and this looks set to continue into 2016-17, despite the ongoing threat of global economic uncertainty and the more recent threat of the UK’s exit from the EU.

Although the volume of work has increased, tender opportunities are becoming increasingly competitive resulting in tighter margins and, despite renewed activity, many UK pharmaceutical producers are not significantly increasing levels of capital expenditure. However, the Government has announced a forward pipeline of over £1.9bn worth of capital projects in the pharmaceutical and biotechnology sectors between now and 2020. In addition to these confirmed capital projects, significant expansion plans have been announced by some of the leading pharmaceutical companies, which should be of interest to construction companies and their supply chains operating in the pharmaceutical sector. A major trend in 2016 has also been a continued capital investment in science parks and university innovation campuses, with a focus on R&D, and enterprise zones.

In terms of construction costs, pharmaceutical R&D and manufacturing facilities are among the most energy intensive and expensive of buildings and are also highly regulated in terms of design and function. Current design and construction trends are moving away from ‘bespoke’ buildings to flexible and mobile laboratories and cleanrooms requiring less time to design and build and incorporating modern methods of construction. The demand for mobile or modular cleanrooms is increasing, driven by industry cutbacks which have forced many pharmaceutical companies to rethink their business and manufacturing operations.

Increasing specialisation within the pharmaceutical industry has brought about varied opportunities for construction engineers and contractors to design and develop R&D facilities, pharmaceutical production processes, and assembly of drug delivery devices/systems, construction and maintenance of highly specialised production facilities, associated service/support facilities and continuous improvement of process operations.

The industry is expected to continue to show modest growth over the next few years, reflecting the positive factors and trends in the growing UK pharmaceutical industry, but also the economic uncertainty created by the UK’s vote to leave the EU, which will constrain growth somewhat. Forecasts are for annual growth of between 4-6% from 2018 onwards.

Keith Taylor, Director of AMA Research said: “So far, the larger pharmaceuticals firms appear to have been largely unscathed by the UK vote to leave the EU – with a significant proportion of the sales of the major pharmaceutical companies generated overseas and a weaker pound likely to result in a significant rise in profits. However, Brexit has the potential to create significant issues for the UK life sciences industry as it may affect the regulation of medicines, EU clinical trials regulations, EU funding for research and access to R&D facilities, access to the single market and R&D workforce, and intellectual property.”

The ‘Pharmaceutical & Biotechnology Construction Sector Report – UK 2016-2020 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.

Forecasts indicate steady medium-term growth for the household textiles market

The UK market for household textiles is estimated to have grown by 3% in 2015, with similar growth forecast for 2016, according to a new report by AMA Research. Consumer confidence remained high in 2015, although market values have been negatively affected by high levels of competition and a proliferation of lower cost imports in this sector. The situation in late-2016 is uncertain, though underlying demand will come from replacement purchases, which in the household textiles market are significant.

Given the maturity of the household textiles market in the UK, sales are heavily reliant on replacement purchases. Daily wear and tear of sheets, towels, pillowcases and similar items, drives the need to replace them on a regular basis and helps underpin demand. Most items are relatively low value and therefore the market is not subject to the same degree of volatility experienced by higher value household products.

Bed linen dominates the household textiles product mix in 2016 with a share of around 40%, followed by filled products, bathroom textiles and then table linen/kitchen towelling, which accounts for a smaller share. Factors influencing the bed linen sector in recent years have included competitive pricing and year-round discounting, which have been compounded by increasing fragmentation and a growing online market. Lower prices have also shortened replacement cycles, encouraging householders to replace worn or damaged linens more often, but lower prices are also stimulating a switch to higher quality bedlinen as consumer tastes become increasingly influenced by exposure to higher quality bedding in hotels, for example.

Market growth in the filled products sector has been stimulated by higher demand levels from the hospitals and care homes sector as well as the hospitality sector. Sales of duvets have remained fairly strong, underpinned by continuing developments in filling materials, whilst steady demand from the contract sector has continued to drive sales of pillows. In addition, another important factor stimulating volume growth has been the extension of ranges within grocery multiples and also discount retailers, with the latter in particular offering filled products at competitive prices.

Bathroom Textiles is a substantial sector, now worth around £300m – sales growth has been steady and largely influenced by the same factors impacting on the wider market.

“Future prospects for the household textiles market are relatively positive, although given the potential for a significant shift in economic conditions; it is currently difficult to make any confident forecasts” said Andrew Hartley, Director of AMA Research. “Current forecasts are for steady but moderate growth of around 2-3% in 2016, and 1-2% per annum in the medium term, reflecting not only the maturity of the market and the potentially challenging economic conditions, but also a continuing polarisation of the market.”

The post-Brexit market points to a number of potential concerns, not the least of which is a fall in consumer confidence and spending. Business confidence may also be affected, although the hospitality sector – a major user of household textile products and an important indicator of the health of the market – is expected to benefit from a weaker pound. On a more positive note, household textiles are relatively low-cost items and largely essential rather than luxury items, with some products, such as towels and bedlinen in particular, subject to high levels of wear and tear. While replacement cycles can be extended, the availability of a greater choice of affordable products on the market means that householders have the option of cheaper replacements, should economic circumstances dictate, but AMA are reasonably positive about the market in the next few years.

The ‘Household Textiles Market Report – UK 2016-2020 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.

Prefabricated Volumetric Buildings Market Report - UK 2016-2020 - Key Facts

• The market for pre-fabricated buildings was estimated to have grown by 27% since 2010.
• It is estimated that permanent volumetric building systems accounted for 40-45% of the total market by value at MSP.
• The healthcare sector is one of the more significant end use areas with 12-15% of the prefabricated market.
• Within the event hire sector, toilets and shower blocks account for 25-30% of uses.
• The top 5 suppliers account for 70% of the market.

These facts have been extracted from AMA Research's report 'Prefabricated Volumetric Buildings Market Report - UK 2016-2020 Analysis', available from www.amaresearch.co.uk or by calling 01242 235724.

Internet Plumbing and Heating - UK 2016-2020 - Key Facts

• The internet is the fastest growing channel of the overall UK plumbing and heating products market, having doubled in the last 3 years. 
• Around 80% of plumbing products sold on the internet are through specialist online plumbing retailers. 
• With online purchases, there is now a greater expectation of next day or two day delivery or collection. 
• Baths and sanitaryware account for 20% of the industry. 
• Own label products sold on the internet are performing particularly well. 

These facts have been extracted from AMA Research's report 'Internet Plumbing and Heating Market Report - UK 2016-2020 Analysis', available from www.amaresearch.co.uk or by calling 01242 235724.

Electronic Security and Access Control - UK 2016-2020 - Key Facts

• Intruder alarms accounted for 35% of the electronic security services market in 2015. CCTV services dominate this sector.
• Several key players in the market have formed collaborative partnerships with IT suppliers to facilitate the integration of different products.
• Looking ahead, the value share of intruder alarms is estimated to decline from 30% in 2015 to 27% in 2020, with CCTV and access control gaining share.
• There are a number of organisations with a business model based solely on cloud-based video storage solutions.
• Smart phone and tablet interfacing is a growth sector in the surveillance market.

These facts have been extracted from AMA Research's report 'Electronic Security and Access Control Market Report - UK 2016-2020 Analysis', available from www.amaresearch.co.uk or by calling 01242 235724.

Budget sector to drive growth in the UK Health & Fitness market

The health and fitness industry in general has performed well over the past 5 years, experiencing steady growth of around 2-3% per annum, and benefiting from an increased awareness of fitness as an essential component of a healthy lifestyle. AMA’s new report focuses on developments in health clubs and fitness equipment to assess the sector from both viewpoints.

The UK health and fitness club market continued its steady expansion throughout 2015 with a significant increase in the number of fitness facilities - performance was primarily driven by the low cost sector with the key operators progressing with significant development programmes. As competition in the low cost sector has increased, larger operators have often taken multiple gyms in urban areas to secure their customer base, and fee structures among many health club chains have been adapted to align with budget club operators. Additional services that most gyms are now providing for their members include specific exercise classes, as well as personalised advice on nutrition and diet. The higher end of the market, which incorporates country club and spa facilities, has also proven to be resilient.

The UK fitness equipment sector is expected to reach a value of over £400m by the end of 2016. Sales of fitness and exercise equipment have risen in line with the improving state of the UK economy, which has led to higher spending by both consumers and operators of commercial gyms, such as hotels and leisure management contractors. Recent growth has also been driven by the booming low-cost/budget gym sector, and the corresponding increase in demand for fitness equipment. This trend is expected to continue in the short-term, and should support increased demand over the next few years.

Innovation is key to growth within both the home and commercial fitness equipment markets, and demand is highly susceptible to new trends and ‘fitness crazes’. Recent examples of trends driving the market include HIIT (High Intensity Interval Training), Zumba classes and use of Vibration Plate equipment. More recently, there have been moves towards equipment that can replicate the feeling and sensation of exercising outdoors, as well as products geared towards training in groups. New digital-based equipment offering tracking and analytics features, that may in some cases be synchronized with consumers’ own devices such as smartphones, tablets and sport wearables via apps, are also growing.

The fitness equipment sector is relatively mature, with many well-established leading suppliers. As a result, the market features a number of well-known brands, although in recent years the growth of lower-cost imports has eroded their position.

“The outlook for both of these markets is good, with modest growth forecast in the medium term, driven by ongoing refurbishment programmes and expansion in the budget sector” said Andrew Hartley, Director of AMA Research. “The health club market is expected to remain in a state of flux as low-cost health clubs continue to gain market share from established medium segment health clubs, leading to lower revenue fees across the industry, while the outlook for the commercial fitness equipment market in the short to medium term is for growth of 1-2% per annum.”

Although the current expansion and investment programmes pursued by many leading health and fitness club operators suggests demand for equipment will rise, a number of towns and cities are saturated in terms of health and fitness establishments and significant growth is unlikely. The future direction of the commercial fitness equipment market is also likely to depend upon how well low-cost and budget gyms continue to develop their presence. At present, this sector accounts for just 5% of the UK’s total number of gyms and health clubs, so there is scope for growth - especially if the economic situation deteriorates as a result of the Brexit vote and consumers reign in spending on non-essentials.

The outlook for the home fitness equipment is also for moderate growth over the next couple of years, although demand may experience a decrease towards the end of the decade. Reasons for this are likely to include continued growth in the low-cost/budget gyms sector, as well as the fact that a significant proportion of the population are unlikely to have the space to fit larger equipment such as treadmills into their properties. Market prospects may also be hindered by the fact that more people appear to favour exercise as part of a social gathering and the popularity of outdoor forms of exercise and the growth of running and cycling clubs. By 2020, the market value is expected to reach £420m, representing an increase of around 6% from 2015 levels, and equates to around 1.2% growth per annum on average.

The ‘Health & Fitness Market Report – Focus on Clubs and Equipment - UK 2016-2020 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.

7% growth per annum expected in the UK Bi-fold doors market despite Brexit fears

In 2015, the UK market for bi-fold doors was estimated to have grown by 12%, according to a new report by AMA Research, with similar growth expected for 2016. Rising from a low installed base, bi-fold demand has increased sharply in recent years driven strongly by significant growth in the home improvement market – both new extensions and replacement -and changing tastes in favour of opening up the home and garden area.

The bi-fold doors market is a relatively new and expanding sector, worth over £70m at manufacturers prices – and much higher in terms of installed value.

As indicated above, a key driver of market growth has been consumer interest in bi-folds – with the residential market accounting for over 50% of sales - while suppliers themselves have contributed to the growth of the market through new developments in frame materials, styles, colours and features. In terms of product mix, exterior bi-folds dominate the sector by both volume and value due to residential use – although commercial interior bi-fold doors account for a significant share of the market.

AMA’s report assesses the market by frame material and, while aluminium is the dominant frame material, timber accounts for around 20% of the market. Overall, the trend for maximising natural light has resulted in increased glazing used for entrance and patio doors and internal doors. Home extensions are a key market – with around 200,000 extensions per annum offering good market prospects for manufacturers and installers alike with bi-folds popular where homeowners are extending kitchens/living areas and want a more open link to the outdoors.

In the commercial office sector, bi-folds have increased in use as interior doors which offer natural light, but offer flexibility by enabling rooms to be expanded or contracted easily. They are also popular for car showrooms and similar businesses allowing easier movement of vehicles and products. Bi-folds have also been in use for many years in the leisure sector as exterior doors for restaurants and bistros, and internal space dividers in the health & fitness sector. Within the leisure sector, replacements feature importantly as older style bi-folds are changed for newer styles and frame materials and more easily operating features.

“The supply structure remains complex and fragmented, but increasingly competitive, as many window and door companies now offer bi-fold doors” said Andrew Hartley, Director of AMA Research. “A number of companies that originally focused on single materials – eg. aluminium, PVCu or timber – have extended product ranges to include alternative material products in order to widen channel exposure. Bi-fold doors have also seen wider distribution generally in recent years, particularly through retail DIY/home improvement multiples and online.”

Current AMA forecasts indicate steady to good growth into the medium-term with the bi-fold doors market growing by around 7% per annum to 2020. Factors likely to have a positive impact on volume and value growth include housebuilding completions, the house moving market, trend for higher value replacements and steady levels of home improvement projects. Bi-fold doors are likely to remain a key product sector for retail window and door companies with second/third time replacements likely to impact on the market in future years.

The impact of Brexit on the residential newbuild and RMI sectors remains extremely difficult to forecast and implications are likely to become clearer as the UK eventually begins the process of negotiation. However, as a minimum, the uncertainty created by the situation may cause the market to become more volatile and may lead to reduced levels of spending on home improvements – though the appeal of bi-fold doors looks looks set to underpin demand going forward.

The ‘Bi-fold Doors Market Report – UK 2016-2020 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.

Higher Education and Student Accommodation Construction - UK 2016-2020 - Key Facts

• The total value of the UK student accommodation sector is estimated to be around £25bn.
• Current forecasts are for a substantial increase in capital investment over the coming years. At over £17.1bn, this is around 60% higher than the previous 4-year average.
• In 2013 the private sector formed around 39% of supply, but in 2016 this has increased to over 46%.
• Only 18% of students are currently catered for in university-operated halls, with overseas student numbers forecast to rise to 870,000 by 2020.
• Previously, growth in the private sector was driven by large players (UNITE, UPP and Liberty Living), but new growth is coming from new companies such as Pure Student Living, Urbanest and the Student Housing Company.

These facts have been extracted from AMA Research's report 'Higher Education and Student Accommodation Construction Sector Report - UK 2016-2020 Analysis', available from www.amaresearch.co.uk or by calling 01242 235724.

Door and Window Fabricators - UK 2016-2020 - Key Facts

• The market for door and window fabricators is estimated to have grown by 9% since 2013, with an estimated value of £2.1bn at trade prices in 2015. 
• Residential windows are the largest sector, accounting for around 35% of the market.
• Commercial windows and curtain walling account for around 25% of the market and have experienced some recovery in recent years.
• Bifold doors are a major growth area in the last 3 years.
• While PVCu dominates the domestic window market, composites have gained significant share in the residential door market – now accounting for around 30% of the market.

These facts have been extracted from AMA Research's report 'Door and Window Fabricators Market Report - UK 2016-2020 Analysis', available from www.amaresearch.co.uk or by calling 01242 235724.