The Window, Door and Conservatory Industry Forecasts are produced three times annually. As with all our industry forecasts concentrates on the demand for PVC window profile, windows, doors and conservatories over the period 2012 to 2020.
Forecasts are expressed as:
- Number of units (windows, doors and conservatories);
- Volume of PVC profile, expressed in tonnes, to produce the product ranges by product line, sector and in total;
- Values at Systems Company, fabricator and installed level by product line, and sector.
Unlike other forecasts that are based upon opinions sought from within the industry, this forecast is based on independently researched facts that are fed into our forecasting model that uses a building block process to establish volumes and values for:
- First-time replacements - for both windows and doors;
- Second-time replacements - for both windows and doors;
- New house building;
- Home extensions.
The report also broadens the range of information for companies that are especially interested in specific sectors whether it is housing improvement, new house building or the non-housing sectors. Part 4 of the report provides both market volumes and values at systems company, fabricator and installer levels sub dividing the totals of the products into the five sectors as set out below:
- Private housing improvement - this embraces first time replacements, second time replacements and home extensions.
- Social housing improvement - this embraces improvements to housing stock owned by housing associations and local authorities.
- Social housing new build - new social (public) house building
- Private housing new build - new private house building.
- Non housing applications - such as schools, hospitals, retail premises, hotels, factories, warehouses, public buildings and care homes.
Where possible hard information is used with other authoritative sources including:
- Updated forecasts and predictions for new house building as published in Autumn 2017 by Experian Construction Forecasts and DCLG (Department of Communities and Local Government);
- Updated forecasts and predictions for Repair, Maintenance and Improvement (RMI) in the housing and non-housing sectors. RMI trends have been a reliable indicator for growth in both the conservatory, window and door replacement market.
- The latest economic forecasts from the ITEM Club published Autumn 2017; English Housing Survey - DCLG;
- Planning statistics - DCLG/Scottish Executive/DOE Northern Ireland;
- Listed Buildings - English Heritage/Historic Scotland/DOE Northern Ireland/Britannia; Other statistics from The Office of National Statistics;
We have also sought the views of UK systems companies, hardware companies and fabricators. Some of the information has been provided to us in detail and on a confidential basis such that we are able to use it to compile trends and build up a model. Additional Information has been obtained from published company reports, business journals, web sites, official statistics and a number of other surveys.
We have set out to provide the best possible forecast for the industry. This has been done by breaking it down into small elements (the building block approach) providing the best chance of a good quality forecast and offers the user of the report the opportunity to critique or adapt in detail. Within the body of this forecast are the assumptions that have been used together with sources of information upon which predictions are based. As ever, we welcome feedback which might help improve these forecasts.
Part 1: Introduction and Summary
1. Introduction and Summary
1.2 Autumn/Winter 2017 Edition
Part 2: Window, Door and Conservatory Volume Forecast
2. Window Volumes
2.1 First Time Replacement Windows
2.2 Second Time Replacement Windows
2.3 New House Building Windows
2.4 Home Extensions
2.6 Total Windows Forecast
3. Door Volumes
3.1 Total PVC Doors
3.2 Composite Entrance Doors
3.3 Total Entrance Doors (Composite and PVC)
3.4 French Doors
3.5 Sliding Patio Doors
3.6 Bifold Doors
4. Total PVC Profile Volume
Part 3:Construction Industry and Economic Forecasts
5. Construction Industry Forecasts
5.1 Construction Industry Outlook
5.2 House Building
5.3 Non Residential construction
5.4 Housing Repair Maintenance & Improvement
6. the UK Economic Outlook
Part 4: Sector Volume and Value Forecasts
7. Volume and Values by Sector
7.3 PVC Doors
7.4 Composite Doors
7.5 Sliding Patio Doors
7.6 Bifold Doors
7.7 French Doors
7.9 Market Value Summaries
This Autumn/Winter 2017 PVC Window Industry Forecast is published some eighteen months after the UK referendum that resulted in the decision to leave the EU and just two weeks after Article 50 of the Lisbon Treaty (the mechanism to start the process to terminate membership of the EU) was triggered.
What is already clear is that the UK economy has held up well in the aftermath of the referendum vote this despite some politicians and economists warning of an immediate negative reaction. The next couple of years are, though, expected to be difficult, with rising inflation eroding real disposable income growth and impacting upon consumer spending. The OECD amongst others is predicting weak economic growth for the UK in 2018 and 2019. The logic behind this includes high levels of debt and the spectre of further hikes in interest rates will be a worry for consumers. Unsecured consumer borrowing grew at an annual rate of close to 10% in 2017 - the chief economist at PwC said “there are limits to the ability of households to further increase their borrowing levels”.
Over the many years we have been producing reports and forecasts for the fenestration industries in the UK and Europe it is clear that the window and door industry is not insulated from the effects of the wider economy. The ITEM Club have forecast that consumer spending will only increase by 1.1% in 2018. However, as the headwinds facing the consumer pick up again - average earnings are expected to increase by 2.9% but prices are forecast to rise by 2.5% - broadly negating wage rises and reinforcing the expected slowdown in the economy. The result of which is to put the brakes on the wider construction industry and in turn the UK window and door industry. There is no reason to believe the window and door industry will buck the trend of low growth. Our forecast reflects this
Immediately post the referendum there was downward pressure on sterling which has persisted. Sterling against the US Dollar has weakened by around 13% and against the Euro by around 8% and is changing by the day. Other currencies that are important to the window and door industry due to components and raw materials being imported have also strengthened against sterling. Inevitably this will result in many important components including hardware, polymer, profile and door slabs increase in cost as forward purchases of currency runs out. Additionally increases to wages and salaries can only be put off for so long. Estimates for the increases to the overall operating costs across the industry that are mentioned above are reflected in the forecasts. By how much cost increases can be offset by productivity gains has to be seen taking into account it takes time for investment to feed through and boost productivity.
UK is not a major exporter of profile or finished windows and doors so the export advantage at this time of a weak sterling is minimal.
On the plus side, the industry is already seeing the share of the total market that foiled and painted windows increasing as too is the range of colours especially entrance doors. Where once there were five or six traditional wood-grain finishes for window profile there are now twenty or more foiled finishes - including pastel and bold colours.
It is now twelve years since the PVC window industry in the UK and Ireland reached its peak. Over the five years up to 2004 between 8 and 10 million PVC windows and 1.2 million entrance doors were produced each year. Many of these are now old and ready for replacement and are accounted for in this report as second time replacements which continues to grow.
It is worth including in this Introduction that the ITEM Club advise against businesses avoiding knee jerk reactions resulting from the Brexit decision. The focus should be on shoring up the business and initiating the research and analysis to enable stra tegic and operational decisions.
However, post the Brexit decision the slower economic growth over the forecast period will inevitably affect construction activity particularly on the private side, with muted demand now projected for the next three years. These growth projections are so small in percentage terms that any hic-up with the value of sterling and/or acrimonious and drawn out Brexit negotiations could cause the industry to go into reverse.
Housebuilding has perked up from a very low level brought about by the recession and is expected to continue to slowly increase both in volume and value. Will the Government find the where-with-all to increase the number of houses built above the 182,000 forecast for 2020? There is both social and political pressure to make this happen. The Government has committed to increase housing construction but this is not expected to be a reality until after 2020. The controlling factors are expected to be the availability of building materials and labour. We would not be surprised if there is not a boost in factory produced buildings (pre-fabricated). All this will be revealed in Government plans expected to be rolled out in 2018.
After enduring a tough time over the past few years conservatory volumes that were starting to edge forward have now been knocked back yet again as consumers hold back on spending on big ticket items. Will businesses such as restaurants and hotels find this a good time to invest in a conservatory or orangery especially with interest rates on borrowing at a historically low level? Or will they put on hold plans to expand at a time that consumers have to tighten their belts?
But there are some additional dark clouds on the horizon as the new UK Government has warned us austerity is still with us - although the chancellor has ditched the deficit reduction programme for now. Interest rates in the UK, are at a historically low and are expected to rise in 2018 and 2019 placing more pressure on consumer spending.
Can the industry remain substantially unchanged over the next three years? Lessons from history suggest it is unlikely. In 2017 some companies have struggled, profits have come under pressure and organisations changed. Yes the period 2018 to 2020 will be a challenging time for the wider industry. However, the window and door industry has proven over recent times to be resiliant emerging over the recent times from the credit crunch, recession and the Brexit shock. Will the next few years see a series of headwinds and storms that will inflict damage to the industry?