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That was then – Palmer adds grim forecast to past growth
September 2017

Headwinds …slowdown …Brexit uncertainty – the latest Palmer report offsets recent above-forecast growth with a less than cheerful forecast of what is to come.

The industry performed above forecast in 2016, according to the report, ‘The Window, Door and Conservatory Markets in Housing in Great Britain 2017’, including growth of 1% in volume terms and 7% in value terms to £4.5bn, driven by a shift towards higher-end products.

This included significant growth in bi-fold doors and growing sales of foiled and mechanically jointed/timber effect PVC-U windows, the former up 9.3% in 2016 to 42,700 door sets.

The market for windows in total grew 1.2% to 6.82million frames and remains dominated by PVC-U. This this was, however, outstripped by a 5.5% increase in installed value to £2.38bn, driven by a shift to higher end products.

The ‘trade-off’ to this growth was a slowing in the volume PVC-U market and a continuing decline in sales of timber windows - which have fallen in volume by more than 60% since 2000. 

More positively, the report found that average installed prices of conservatories was up by 12%, while conservatory replacements saw growth of 6%, although this was offset by a decline in first time installations of 4%.

However, Palmer is far less sanguine about its prospects going forward, with a forecast of pockets of substantial growth against a backdrop of market contraction in volume terms at least of 4% this year, 2% in 2018 and 1% in 2019 before a return to moderate growth in 2020.

“The industry has out-performed our forecasts last year but we’re now seeing near stagnation in the housing market, which is a tell tail sign of tougher economic conditions to come. This and the uncertainty around Brexit has led to a weakening of consumer confidence, which we expect to bite in the second half of this year and through next”, explained Robert Palmer, Director, Palmer Market Research.

He continued: “This is already contributing to a level of hesitancy among housebuilders, which will make government policy and continuing investment in the Help-to-Buy scheme, increasingly key going forward.

“The social sector may be less effected by Brexit but it faces its own budgetary pressures, while we expect some funding to be diverted to the replacement of cladding and improvements to the safety of high-rise buildings in the fallout from the Grenfell Tower disaster.”

If these factors present generally unfavourable conditions, The Window, Door and Conservatory Markets in Housing in Great Britain 2017 nonetheless identifies some significant areas of growth going forward. These are for the most part defined by product and material type. 

The growth recorded in bi-fold door sales and those of mechanically jointed PVC-U windows means that both are tipped for significant growth going forward as part of the general shift to higher end products. The fortunes for windows, doors and conservatories are again mixed, defined by a combination of installation and material type. 

Palmer continued: “What we’re seeing is a very real shift in proposition. This in general is leading away from volume product to a higher end higher margin offer. This is defined by material type, by product and even the design of those products, for example the shift to mechanical jointing and flush casements in PVC-U. 

“What is also clear is that we’re already seeing some pretty unfavourable economic headwinds and these are unlikely to dissipate anytime soon, which makes product development in the right areas a key foundation of future growth but also longer term viability.” 

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