Tuesday, 5 April 2016

The fall and rise of the Window and Door fabrication market...but for how long?

The window and door fabrication market has turned from steady decline over several years to growth since 2013. In 2015 it was estimated to have grown by 3% with prospects of further growth over the next 5 years.

Our clients in this sector have also confirmed this growth, although the future of this competitive market is quite dependent on the replacement market in the residential sector. As a result, many fabricators have been enhancing and broadening their range offering and developing their sales and marketing teams to ensure that they maintain and make the most of the growth opportunities available.

A new report by AMA Research takes a detailed look at the size, sectors, trends, prospects and key drivers of this still important market of the building industry. 

Summary of report
Key defining factors in this market in 2015-16 are: market maturity (in particular for the domestic replacement market), fragmentation, competition, cost-management, building legislation, ‘green’ building, tough market conditions and diversification. The development of the economy is also a key factor to the glazing sector, impacting on consumer confidence, housebuilding, public spending and commercial construction output.

There is significant over-capacity in the industry resulting in an intensely competitive market, especially in the PVCu sector - prices and margins remain under pressure as companies compete for business.

The supply structure remains very fragmented, comprising a mix of vertically integrated retail glazing companies, PVCu trade fabricators and fabricator/installers, aluminium systems fabricator/installers, bespoke glazing contractors, composite door manufacturers, commercial glazing specialists, roof light manufacturers, steel window manufacturers and major joinery companies etc. 

Closures and acquisitions/mergers continue to be a feature of the market in 2015-16, but in lower numbers than experienced during the recession and noted in the last edition of this report. In particular, there has been further rationalisation among national retail companies; a sector where change has often been a feature, and where corporate ownership is a key focus for change latterly. The aluminium sector has experienced a period of consolidation, but remains the largest supplier of windows and doors to the commercial sector. It has lost its position as a major supplier of domestic windows and doors as the market is mostly now PVCu. 

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In 2016, the prospects for this industry in the immediate term remain relatively good -although a volatile economy in early 2016 casts some uncertainty over short term prospects. However, the UK is performing relatively well and a steady improvement in the glazing market in the medium term is anticipated. The UK market for residential windows is very competitive and is likely to remain so, though within the next few years we expect capacity and demand to become more balanced as demand from the housebuilding sector continues to expand, resulting in less pressure on supplier prices and profitability. Ultimately, the industry is mature and, in the longer term, heavily dependent on replacement demand in the residential sector, supported by new build activity in key non-residential markets.

You can buy the report by contacting AMA at sales@amaresearch.co.uk

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