UK household textiles market was worth an
estimated £1.36 billion in 2013, according to a recent report by AMA Research,
with further growth of 3-4% estimated for 2014.
This market is mature and demand is heavily
influenced by external factors such as household income, consumer confidence
and spending, underlying strength of the housing market and trends in home
decor.
Sales of bed linen are valued at around £560m
in 2013, with steady growth forecast for 2014. Duvet covers accounted for the
largest sub-sector, followed by sheets, pillowcases, bedspreads/throws/bed
runners and blankets. Sales of filled products increased by around 2% in 2012-13
but with good growth in 2014 as the economy slowly recovers. Sales of duvets
are likely to remain positive with evidence of consumers trading up to higher
value products likely to underpin the sub-sector. The market for bathroom
textiles is valued at over £200m, with towels accounting for over 80% of the
sector.
Supply and distribution of household textiles
is extremely fragmented reflecting the wide product range and alternative
routes to market. Many suppliers and retailers have reported increased footfall
and stronger demand, while others have seen less of an upturn, and there have
been a number of high profile closures in recent years. Some traditional retail
outlets have also come under increasing pressure from online sales channels.
The rise in housing transactions and
significant improvement in the number of first time buyers are key to ongoing
growth in demand for household textiles. The market is likely to experience
shorter replacement cycles in some sectors into the medium-term as consumer confidence
and spending recovers, which should also help underpin steady growth.
The bed linen sector is set to remain the
largest sector with share value remaining at around 40%, while a high demand
for duvet covers, particularly for children’s character sets, is likely to
underpin the sector into the medium-term. Duvets are likely to benefit from
trading up to more natural materials and consumers owning different weights for
summer/winter usage, whilst pillows and cushions are likely to show steady
underlying growth.
“Polarisation
of the market is set to continue into the medium-term with intense price
pressure at the lower end of market likely to constrain future value growth” said
Andrew Hartley, Director of AMA Research. “Continuation
of the trend to ‘on-shoring’ may lead to some value growth in the mid-upper
market sector, though this could be partially offset by low cost imports driving
the lower market sector into the medium-term.”
The current positive trends in the housing
market and underlying economy are likely to remain key drivers for growth in
the short-medium term. However, more moderate annual rates of growth are
expected towards the end of the forecast period in 2017-18, resulting in market
value of around £1.6bn by 2018.
The ‘Household
Textiles Market Report - 2014-2018 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.
UK is the 9th largest pharmaceutical market in the world,
and the sector makes a greater contribution to the UK economy than any other
industrial sector – and also generates an annual trade surplus of almost £3bn.
The industry is
particularly important in terms of its R&D contribution and the pharmaceutical sector alone
accounts for more UK-based business R&D than any other manufacturing sector
– around £4.2bn is spent on pharmaceutical R&D in the UK,
almost 25% of the total industrial R&D spend.
The top 10 global
pharmaceutical companies account for around £24bn or almost half of total UK sector
turnover. Many
of the top global pharmaceutical companies have a considerable manufacturing and
research presence in the UK, with 12 out of the top 20 global pharmaceutical companies
accounting for a total of 55 UK sites.
Known as ‘The Golden Triangle’ the centres of
London, Cambridge, Oxford and Stevenage house the UK’s largest biomedical cluster in the UK. Clusters of pharmaceutical companies are also
found in areas close to universities. The North West, in
particular, is home to ‘Big Pharma’, with several global pharmaceutical
companies operating a facility in the region.
Capital expenditure by pharmaceutical companies in the UK
has been in decline, with R&D capital expenditure falling from £496m in
2002 to just £137m in 2012, and manufacturing capital expenditure declining
from a peak of nearly £1bn in 2001 to just £422m in 2012.
However, the Government has announced a forward pipeline
of over £200m worth of capital projects in the pharmaceutical and biotechnology
sectors between now and 2018. In addition to these confirmed capital projects,
a number of expansion plans have been announced by leading pharmaceutical
companies, which are reviewed in AMA’s report and should be of interest to
construction companies and their supply chains operating in the pharmaceutical
sector and to suppliers of laboratory and allied products. Increasing specialisation
within the pharmaceutical industry has also brought about varied opportunities
for construction engineers and contractors, and also broadening into other
niche construction sectors in advanced manufacturing, food processing etc.
“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” said Andrew Hartley, Director of AMA Research.
The ‘Pharmaceutical
and Biotechnology Construction Sector Report – UK 2014-2018 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.
The electrical accessories market is
estimated to be valued at just under £1.5bn in 2014, according to a new report
from AMA Research. The market has seen growth of 16% since it bottomed out in
2009 and is now only 7% below its peak in 2007.
Although the difficult economic situation
impacted negatively on market value between 2008 and 2010, a substantial rise
in raw material costs inflating prices and offsetting low demand, coupled with
modest improvements in the economy and growth in the construction market
resulted in 10% market growth in 2011. While the market declined in 2012, signs
that the economy was improving started to appear in 2013, housebuilding picked
up and in addition, the electrical accessories market continued to be supported
by major public sector projects, committed to prior to cuts, and as a result
the market saw healthy growth in 2013.
The electrical accessories market, according
to AMA’s definition, is dominated by low voltage cable systems with value share
of over 50%, followed by circuit protection with around a quarter of the market
and wiring accessories, which accounted for the remainder. As the electrical
accessories market is mature, the product mix has remained fairly stable in
recent years.
Raw material prices play an important role in
determining market performance for electrical accessories, with the price of
cable in particular being highly dependent on copper prices. These have fluctuated
widely in recent years. Legislation on energy efficiency and carbon emissions
as well as volatile fuel prices has seen interest in, and use of, integrated
systems spreading into the wider domestic and light commercial markets to
provide greater control for heating, lighting and all electrical systems.
Activity at supplier level during the
recession has been focused on consolidation, rationalisation and cost cutting
exercises, with many taking the opportunity to integrate earlier acquisitions,
streamlining purchasing processes and even repositioning their businesses.
As the electrical accessories market is a
mature and sizeable market, recovery will be relatively slow and steady.
However, market value is expected to surpass its 2007 peak level by 2016.
Pressure on pricing is likely to remain a key aspect of the market for some
time. The current focus on solutions and systems within the electrical products
market will continue to lead to demand for integrated systems in both the
domestic and commercial sectors in the medium term, as well as an increased use
of pre-fabricated wiring assemblies and wireless switches.
The demand for environmentally friendly
products continues to be a major issue and this is a factor which is likely to
be more influential in future years, as homeowners and business operators
alike, use whatever means they can to improve the environmental credentials of
their properties. This will lead to increased use of individual and central
controls for lighting and other electrical products, perhaps creating demand in
the electrical accessories sector.
Product development will continue to focus on
environmental efficiency, wireless systems, integrated controls, reduced space
and impact, quick installation such as prefabricated units and low installation
application such as plug and play connections to reduce time on site and cut
‘down time’ during RMI situations.
“Current
forecasts indicate annual growth rates of 5-6% from 2015 as the economy
improves and house building activity increases” said Keith Taylor, Director of AMA Research. “It is expected that the market value will
be around £1.8bn in 2018. However, this will depend on the speed of economic
recovery and any fluctuations in raw material prices.”
The ‘Electrical
Accessories Market Report - UK 2014-2018 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.
The market for beds and mattresses fell steadily in the
2008-2011 period, before showing consistent growth to reach an estimated value
of £650m in 2013.
This market is mature and as such is experiencing high
levels of price competition, in particular from imported products. Faster
replacement cycles and trading up to higher value products are some of the
factors that have contributed to market growth in recent years.
Divans account for around a third of the market by value,
although market share has been eroded steadily by the strong growth in demand
for bedsteads, including wooden, upholstered and metal bedsteads. Overall
bedsteads currently account for around 28%, with growth supported by a wider
range of product options.
Mattresses sold separately have grown to account for
around a quarter of the market in value terms. This growth has been underpinned
by the growth in the higher value pocket sprung sector and by the growing
popularity of other materials, such as memory foam. Mattresses are one specific
area of the beds market where opportunities for value growth exist, with
consumers trading up to higher quality products. In addition, the growth of
bedsteads has also supported the demand for higher quality mattresses.
During the last 5 years there has been a marked trend
away from single to double beds and, in particular, to king sized beds. This
growth can be attributed largely to falls in the price of double beds relative
to single beds, with prices being driven down as a result of the high level of
price competition within the market.
The beds sector is dominated by several large suppliers. Total
imports of beds and mattresses have increased steadily in the last few years,
reaching £164.2m in 2013, with imports of metal bedsteads accounting for 53% of
bed imports by value in that year. Since declining to £23.7m in 2006 exports
have expanded steadily to reach £52m in 2013. The distribution of beds is
dominated by the furniture multiples with 46% of the market.
Total sales of beds are forecast to reach £760m by 2018,
with the market showing steady and increasing growth during that period. This
market is also likely to benefit from investment in the contract sector,
particularly in the hotel and leisure sector, although this may be offset by
reduced Government expenditure in the education and health sectors.
Manufacturers are likely to continue to add value with
features such as integral side tables, storage and upholstered bedsteads,
particularly in leather, along with higher quality mattresses, in order to
combat the declining average prices in the beds sector.
“The mature nature of
the beds market has resulted in the emergence of niche sectors, which are
expected to support volume growth in the near future, as prospects for the UK
economy improve. In addition, the market will be supported by higher levels of
replacement purchasing, added-value purchases and some value growth at the
upper end of the market” said Keith Taylor, Director of AMA Research.
However, the beds and mattress market is mature and
heavily reliant on manufacturers encouraging shorter replacement cycles. As a
result the development of value added features and the communication of these
benefits to the consumer are likely to continue to be key elements in terms of
product development and the stimulation of early replacement sales. Parts of
the contract sector are not expected to experience the high levels of growth
seen in the past, as expenditure in sectors such as health, education and the
MOD has been reduced as part of the Government’s austerity measures.
The ‘Upholstered
Furniture and Beds Market Report - UK 2014-2018 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.
By value, data indicates that the market for the
collection, treatment, recycling and disposal of controlled waste was worth an estimated
£18.9 billion in 2013. Strong underlying annual growth rates have
been driven by the implementation of EU Directives, aimed at reducing the
volumes of landfilled waste and increasing the levels of material recovery
through recycling, composting and energy-from-waste.
Above all, the impact of the Landfill Tax escalator on
landfill gate fees has made these alternative approaches more commercially
attractive. The downturn in the UK economy suppressed growth rates in 2012 due
to lower levels of waste arisings, declining prices for many types of recyclate
and the delay to many infrastructure projects.
Over the
medium-longer term, however, the key 2020 targets for both the EU Landfill
Directive and renewable energy mean that regardless of the economic situation,
central government, local authorities and businesses do not have the option of
scaling back waste reduction and recycling objectives. There remains a pressing
need for the UK to improve waste recovery rates, particularly in the commercial
and industrial waste (CIW) sector, and to develop a suitable waste collection,
treatment and recycling infrastructure in this sector.
From 2014 through to 2018, it is expected
that there will be an increase in the market growth rate, underpinned by the EU
Landfill Directive target for 2020 which will necessitate an increase in waste
recovery rates and a major increase in investment in the infrastructure needed
to deliver this, by possibly as much as £5bn.
To achieve both these aims, energy-from waste
(EfW) technologies, in particular advanced conversion technologies (ACT), will
be core to government plans to meeting both the Landfill Directive and
renewable electricity targets. Despite opposition from local interest groups
and NGOs, there are a large number of 'mass burn' EfW incineration and ACT
plants in the development pipeline that will be used to dispose of large
volumes of the 21 million tonnes of residual ‘black bag’ waste currently being
landfilled.
There has also been marked growth in the
rolling out of anaerobic digestion (AD) plants treating food waste, underpinned
by Landfill Directive requirements to divert biodegradable municipal waste from
landfill. From just one facility in 2005, there were over 60 AD plants taking
food waste at the end of 2013.
Keith Taylor, Director of AMA Research said: “The current rate of expansion and
convergence with the EfW sector continues to attract new players into the UK
waste management industry, particularly from overseas. The market has also seen further consolidation among UK companies
over the past 2-3 years.”
By 2018, it is estimated that the market for
the collection, treatment, recycling and disposal of controlled waste will be
worth around £24bn, following annual growth rates of between 3-7% per annum
during the period.
The ‘Waste
Management Market Report - 2014-2018 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.
The UK domestic central heating market is substantial,
with an estimated total value of around £1.1 billion at manufacturers’ prices
in 2014. Over recent years this market has benefited from more stringent energy
efficiency legislation and a drive towards sustainability.
Currently around 92% of UK homes have central heating
installed, but while the market can now be considered mature, it still offers
plenty of growth potential through upgrade and replacement purchases as well as
product innovation to improve thermal
performance, energy efficiency and control.
Between 2009 and 2012, the UK domestic central heating
market was comparatively volatile, in line with the uncertain economic
situation at this time. However, since January 2013 the market for domestic
central heating products has seen a notable increase, with demand picking up as
the economy improves. This growth can be partly attributed to the introduction
of Government initiatives such as the ECO scheme and the Green Deal in 2013 as
well as the further tightening of energy efficiency legislation in all product
sectors of this market.
Estimated at £637 million at MSP in 2013, the boiler
sector dominates the industry's sales. This is followed by radiators, heating
controls and circulator pumps. The majority of these products are distributed
via the trade channels such as builders/plumbers merchants and electrical
wholesalers. However, replacement and retrofit products are often distributed
via the DIY multiples and Online retailers. Other distributors include
specialist heating retailers, hardware stores and catalogues. A number of
products are also sold into OEMs.
In 2013 the market for domestic central heating products
could be broken down into three key
areas; refurbishment, which accounts for over 80% of sales, new build
and first time installations. A major area of support for the market is
expected to come from the domestic refurbishment sector. With new legislative
measures, householders are now more aware of energy efficiency and the
environmental impact of domestic central heating products.
The future performance of the UK domestic heating market
is likely to be influenced by overall trends in house building, home
improvement, fuel prices, energy efficiency legislation, renewable
technologies, and technological developments also niche market drivers such as
the self-build and conservatory markets.
Increasing legislation represents a major influence in
the long term development of this market. In addition to the demands of the European
ErP directive, all radiators sold in
the UK since July 2013 have to conform and have outputs verified to British
Standard BS-EN442, something which is supporting the UK radiator industry as a
whole, as it will eliminate low cost, imported products that do not meet this
new mandatory standard. Higher levels
of efficiency are also likely to be driven by the 2014 revisions to Part
L of the Building Regulations.
Increasing awareness of energy usage and cost among
consumers, partly as a result of the smart meters installation programme under
which 53 million gas and electricity meters will be replaced with smart meters
by 2020, is also a factor. This will also drive growth and product development
within the heating controls sector, as demand for more sophisticated control
products filters through into the consumer segment. The Governments’ renewable
energy strategy with initiatives such as the domestic Renewable Heat Incentive
(RHI) and Feed-in Tariffs (FIT) is likely to lead to further development of
heating systems that are compatible with these technologies.
“The outlook for the
UK domestic central heating market in Q4-2014 remains positive, with the
continuing recovery in the UK economy and the related upturn in housebuilding
and consumer confidence. However, with the election in mid-2015, uncertainties
do exist regarding Government policy after this time” said Keith Taylor,
Director of AMA Research. “By 2018 it is
estimated that the UK domestic central heating market will be worth some £1.3
billion, representing an increase of around 18% when compared to the estimated
market size in 2014.“
The
‘Domestic Central Heating Market Report
- 2014-2018 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.
In 2013 the Upholstered Furniture market was worth an
estimated £1.6bn (at MSP), with the domestic market accounting for around 90%
in value terms and the contract sector 10%. The financial crisis and the ensuing decline in the
housing market had a serious impact on consumer confidence, with ‘large ticket’
items suffering badly, particularly where loan facilities were involved. As a
mature market, the high level of price competition amongst major retailers has
also restricted value growth.
Although sales of 3 piece suites have declined, suites
consisting of a sofa and at least one other piece still account for 60% of the
market, with combinations of 2 sofas becoming a popular choice. Sales of single
sofas and convertibles represent an important part of the market, with a
combined share of around a third, while armchairs sold separately account for a
smaller share of the market. Sales of action
furniture have also increased slowly and now account for almost 20% of
the market, with most of the major manufacturers including such products in
their ranges.
The share of the total market held by leather furniture
continued to grow until the recessionary period, supported by the wide range of
styles and designs and the increasing use of leather in other furniture
sectors, home furnishings and accessories. The penetration rate has declined
since then, although most of this decline has been offset by the increasing
popularity of upholstery combining both fabric and leather finishes.
Imports of upholstered furniture reached their peak in
2006 at a level of £797.8m, but have since fallen to £710.3m in 2013 – around
40% of the market – with imports from China now accounting for the major share,
although Italy remains an important source, despite declining exports to the
UK. Exports have increased steadily since 2010, reaching £71.4m in 2013.
The supply structure of the upholstered furniture market
has changed dramatically over recent years following the sale of the Christie-Tyler subsidiaries. The furniture multiples continue to dominate the distribution
structure with almost 50% of the market.
The development of the market is likely to continue to be
influenced by the high level of price competition, although sectors such as
leather/fabric furniture and action furniture are expected to gain share. Sofas
and chairs are also expected to gain share at the expense of 3 piece suites, in
line with the growth of single person households, combined with the trend
towards smaller accommodation.
Multi-functional furniture has made inroads into a number
of furniture sectors in recent years, with storage an increasingly important
issue. Tailored designs and clean lines are expected to remain popular in line
with contemporary trends.
“The value of
imported products within the upholstered furniture market has increased in the
last three years, although the rate of penetration has not increased and this
should provide some respite to UK based manufacturers, who seem to have held
their own in those years, although pressures on price are sure to continue for
both suppliers and retailers” said Keith Taylor, Director of AMA Research.
Total sales of upholstered furniture are forecast to
reach £1.9bn by 2018, following consistent growth in the 2014-2018 period.
The ‘Upholstered
Furniture and Beds Market Report - 2014-2018 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.
Research’s estimates indicate that the market for
domestic window coverings in the UK was worth over £1.1bn in 2013, having experienced
growth of around 3% over 2012. The upturn in the market in 2013 followed two years of
decline, though the degree of improvement varied significantly between the
different product sectors.
Growth was largely driven by improvements in the housing
market, with economic recovery boosting consumer confidence. The market is very
mature and replacement purchases are
the dominant sector, accounting for an estimated 68% of sales in 2013, though
the ‘new housing’ and ‘move to a new home’ categories have also
seen growth over the last 2 years.
The UK market for curtains was worth an estimated £535
million in 2013, representing a small increase over 2012. Readymade curtains
accounted for over 50% of sales with a share that has remained relatively
unchanged over the last 5 years, while custom made curtains and curtain fabric
accounted for lower shares.
Demand for window blinds has also been relatively buoyant,
with growth of over 3% in 2013. Conservatories, a key end-use application for
blinds, still accounted for more than a quarter of sales in 2013, though share
has fallen in recent years reflecting the declining consumer appeal of
conservatories. Custom made blinds account for over 70% of sales and venetian blinds
are still the top-selling domestic blind in the UK.
The supply and distribution of window coverings is both
fragmented and diverse, reflecting product mix as well as delivery,
installation and service requirements. Mail order, internet and catalogue
stores are now the largest distribution channel, but closely followed by
department stores/variety stores and grocery multiples.
Andrew Hartley, Director of AMA Research said: “The stronger economy is likely to have a
positive influence on future sales. Growth in housebuilding creates new demand,
while a recovery in housemoving will also help drive up sales, as new curtains
and blinds are seen as a relatively quick and low cost way of improving the
décor of a new home. In addition, we are
likely to see an increasing amount of ‘trading up’ to higher value products as
householders’ spending power continues to improve.”
The market is likely to experience further fragmentation,
as more suppliers and retailers broaden their range of products and services to
maximise sales potential and try to add value wherever possible. A further rise
in online shopping is also forecast, particularly within the homewares sector,
and tablets and smartphones are increasingly used.
Our forecasts indicate that the total windowcoverings
market will experience further steady annual growth of around 2–4% up to 2018, with
the market forecast to be worth around £1.28 billion by 2018.
The ‘Domestic
Window Coverings Market Report - 2014-2018 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.
Under reforms in the
Health and Social Care Act, the NHS has undergone major structural change with
the management of the NHS, including its estate, decentralized as more power is
handed to Clinical Commissioning Groups (CCGs).
In addition, with NHS capital spending now drastically reduced, the process of funding new hospitals and primary care facilities has
also changed. For
procurement purposes, the most significant change for the NHS comes in the
transfer of commissioning functions from PCTs to GP-led CCGs and NHS England,
which has lead to the increased provision of
services in the primary care setting.
With more
healthcare services being driven out of the acute setting and into the primary
sector, many
GP practices are already expressing concern about how they can comply with the
CQC requirements and where funding for property alterations may come from. In
February 2014, NHS England announced that it had put the vast majority
of GP premises investment on hold while it develops a national framework to
evaluate bids for funding. The broader policies of developing GP-led commissioning
have undoubtedly lead to greater co-operation between the private and public
sectors and more work with private providers and their construction teams.
A further driver of increased partnership with the
private sector is also taking place in the acute healthcare sector with the
creation of NHS Foundation Trusts,
under which hospitals can generate their own income. As a result, there has been a rise in private providers
refurbishing part of existing hospitals, adding extensions, new-build
facilities or even taking on the full operation of an NHS hospital. Foundation Trusts are expected to be a popular target for construction
companies as they tend to be more commercially aware and are usually more financially
robust. Furthermore, Foundation Trusts are moving towards more longstanding,
partnership-style relationships with the construction supply chain, with the
focus on building up long-term relationships.
As a result of these reforms, the nature of future work
in the healthcare sector is changing to reflect a more rationalized estate,
with the majority of healthcare clients reviewing their healthcare estates in a
bid to achieve efficiency savings. The transfer
of the NHS estate to NHS Property
Services in April 2013 amounts to some 4,000 sites and a maintenance
backlog of around £4bn.
The future focus of
NHS services will be on moving care within or closer to home, more regional
services and the closure of some hospitals. A capital programme is being developed, which is likely to see more
healthcare work coming through at local level. In the months during which the
PCTs were abolished, a number of healthcare projects were put on hold, but over
the next 18-24 months opportunities for work in the sector are likely to
re-emerge.
The joint venture
structure as seen in PF2 and ExpressLIFT to replace the traditional PFI model now seems to be the way
forward for privately financed development in the NHS. LIFT also has experience of bringing in capital investment
into rundown areas. As public spending tightens, the shared use of buildings
with other public sector bodies may be the only way that investment into new
facilities can be achieved.
In the years ahead, NHS trusts and hospitals are
expected to focus on the maintenance of their estates with refurbishment
programmes and on improving staff and patient facilities. Projects are likely
to continue at the smaller end of the scale in value terms, but there will be a
high volume due to the need to improve the condition of the healthcare estate
and most of these will be procured under P21+.
“The main challenge
for contractors will be to reduce build costs and develop standardised designs
and techniques. The current economic climate has focused all NHS trusts on
capital efficiencies – how to achieve more for less.” said Andrew
Hartley, Director of AMA Research. “The construction
industry will be looking to work closely with newly formed Foundation Trusts
and CCGs in the primary care sector with advice and ideas on how to utilize
existing assets to reflect the changing nature of health care needs within
their area.”
Despite reforms and
austerity measures, investment in the NHS still remains a priority for the
Government, with revenue funding for the NHS protected until 2016, and
increasing to £115.1bn in 2015-16. At the same time, NHS
capital funding will rise to £4.7bn a year by 2015-2016. The Government has
indicated that it may need to extend its austerity measures beyond 2016, which
will mean further funding constraints for the NHS.
The ‘LIFT
and P21 Procurement in Healthcare Construction Market Report – UK 2014-2016
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.
In overall terms, construction activity in the entertainment
and leisure sector has performed relatively well during the downturn compared
with other sectors, with construction output values reaching around £5.7bn in
2013, a 14% rise on 2012. However, expansion and investment have been largely
confined to the budget hotels, health and fitness and, more recently, the
cinema segments, with less buoyant activity in mid-market hotels, pubs and the
gaming sectors where some major operators have reigned in capital spending
plans.
The largest sector within the UK
leisure industry in terms of revenue is the food service industry, worth £45bn in 2014, of which sales in
the restaurant and fast food sector account for over 50%. The restaurant sector has experienced a difficult
trading environment over the past 5 years and the pub sector in particular has
seen considerable restructuring. While spending has not reached
pre-recessionary levels, consumers are returning to restaurants and
refurbishment activity within the sector is largely driven by international
businesses looking to expand in the UK.
After years of being constrained by capital budgets, hotels have now
refocused portfolio investment through refits and refurbishment programmes to
maximize occupancy levels rather than through new build properties – though the
exception has been budget hotels where value chains continue to expand their
portfolios through new development. Hotel construction is expected to be one of
the fastest-growing sectors in 2014, boosted over the next few years by
competition between budget hotel chains.
A further trend emerging from the recession is the rise
in popularity of the budget gym sector, where membership prices are around 50%
cheaper than for traditional clubs. As in the hotel sector, the budget gym
market is forecast to increase market share as consumers look to spend existing
disposable income more wisely. Many budget operators have
aggressive expansion plans for 2014 and beyond.
In 2014, the fortunes of the UK leisure market are thought
to have received a boost from major sporting events such as the Commonwealth Games in Glasgow, stages of the Tour de France in
Yorkshire, Cambridge and London, the Ryder
Cup at Gleneagles, the World Cup etc.,
which could have a significant positive impact on both regional and London
leisure market performance. However, market performance has been uneven.
“Whilst the outlook
for the hotel and leisure sector is now more positive, the implications for
construction, fit-out and refurbishment work in the sector remains mixed” said Andrew Hartley, Director of AMA Research. “Significant
expansion plans have been announced by budget hotels, value gym, food-led pubs
and cinema sectors, contrasting with less buoyant prospects for mid-market
hotels and the betting and gaming industry.“
The outlook for the
hotel, leisure and entertainment sector as a whole remains positive, with
annual output increases of 2-5% currently forecast to 2018. UK tourism spending is also expected to continue to
grow strongly to 2025, with inbound tourism the fastest growing sector with
growth rates of 5-6% forecast. Much of this growth is being driven by higher consumer
spending as the economic recovery gathers pace and is becoming firmly
established.
The ‘Construction
in the Hotel, Entertainment & Leisure Sector Report – UK 2014-2018
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.
