Monthly Email News for the Architectural Aluminium Industry

CAB Q4, 2019 Survey:
Continued confidence despite
concerns over rising costs
January 2020

CAB Chief Executive, Justin Ratcliffe considers the latest CAB State of Market Survey Q4, 2019.

The very latest CAB State of Market Survey for Q4, 2019 showed large rises in confidence for expected sales volumes over the next quarter/year. In the next quarter 80% net balance of members forecasted growth (43% in Q3) while 79% net balance of members forecasted growth in the year ahead (57% in Q3).

Once again members were as positive or more positive across all the investment metrics for the year ahead compared to the previous 12 months although concerns remain over ever rising cost factors especially wages and salaries.

Interestingly, research conducted by NatWest, in partnership with Warwick Business School recently highlighted that UK construction companies are focused on keeping down costs and overheads, with 45% citing that as the key challenge they face – closely followed by attracting skilled employees at 44%.

Looking at the sales in Q4 compared to a year ago, 40% of CAB members reported a rise above 5%,15%, a rise of up to 5% and 35% no change. Only a 10% of members reported any reduction.

Overall CAB members expected overall cost inflation to persist especially over the year ahead with a large increase on the last quarter with 90% net balance expecting increases (58% in Q3). A more modest 57% forecasted unit cost rises in the next quarter (against 45% in Q3).

Continued demand for skilled labour placed significant upward pressures on wages and salaries with 90% net balance of members highlighting it as a key cost factor (67% in Q3). Energy costs and fuel costs 65% (43% and 52% respectively in Q3). Raw materials with 45% net balance of members (67% in Q3) also continued to exert upward pressure on manufacturers input costs.

Demand was reported to be the key constraint on sales growth over the next 12 months for 50% of CAB members (48% in Q3). The other major constraints were labour availability (15%) and capacity (10%). However, 10% of members reported no constraints.

Confidence in the year ahead encouraged CAB 40% net balance of members to forecast an increase in headcount (25% in Q3) in the next quarter with the 50% seeing an increase in the year ahead (same as Q3).

Overall capacity levels were reported to be sufficient in Q4 given sector output and demand. 44% of members reported that they expected to operate at between 90% and full capacity over the next quarter (35% in Q3, 2019).  In a year’s time, capacity utilisation was expected to be 90% or higher according to 28% of members (45% in Q3).

Once again there was a very positive view of capital investment over the next 12 months which continues to be a very strong feature of the CAB State of Market Survey. In Q4, five out of six metrics showed a forecasted increase for the year ahead compared to the past year. These included Product improvement (60% compared to 25%), R & D (55% compared to 40%) and E-business (45% compared to zero net balance). Plant/equipment was slightly down at 60% net balance for the year ahead compared to 75% for the year before.

Please contact for further information on CAB, it’s activities or how to join for 2020. Alternatively ring the office on 01453 828851.

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