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Key Areas Executive Summary Table of Contents
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THE MARKET
SUSPENDED CEILINGS
PARTITIONING
SUPPLIERS AND DISTRIBUTION
FUTURE PROSPECTS
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In 1998, the market for suspended ceilings and partitioning systems was worth an estimated £279m at manufacturers selling prices. These markets are highly volatile, reflecting strong cyclical changes in the commercial construction market.
Both markets saw very high growth during the boom years of the late 1980s due to strong demand from the very buoyant private commercial construction sector. During this period many new companies were established, while those already in existence were rapidly expanding as a result of high confidence levels and buoyant trading conditions.
However, these buoyant economic conditions rapidly developed into inflation, eventually resulting in a severe economic recession. The need for installation of these products into new properties dwindled as a result of a rapid decline in commercial new-build activity. As a result, the suspended ceilings and partitioning systems markets began to rely mainly on the RMI market, resulting in severe decline in these market sectors for several years.
General recovery in the economy stimulated a modest recovery in sales of ceilings and partitions from 1994. However, it was not until 1996, and to a greater degree 1997, that buoyant conditions could really be said to have returned to these markets.
The chart shows the market has grown by around 20 percent in the last three years, although in real terms this is much lower at around 10 percent. The next few years are anticipated to see growth of around 3-4 percent in real terms, slowing to 2 percent in 2002 and 2003.
Short-term prospects are therefore optimistic. However, in the much longer term, both markets are likely to be substantially affected by the slow but accelerating change in working practices. This may ultimately result in very small offices at which only a few employees are based, with the vast majority of employees working from home. Need for office related products including suspended ceilings and partitioning systems may therefore be greatly reduced in the longer term.
The market for suspended ceilings has performed better than relocatable partitioning in recent years, and generally due to their use in a wider range of end-use sectors do not suffer as greatly as partitioning from downturns in the economy. This market has grown by around 25 percent between 1996-1998 and was worth an estimated £141m in 1998.
Suspended ceilings are installed for many reasons. A key motivating factor for their use is aesthetics to conceal equipment such as air conditioning equipment and lighting wiring, with both of these introduced extensively into a wide variety of applications. They are also installed for sound attenuation and to benefit acoustic levels, particularly in offices.
In terms of end-use sectors, offices are the most significant taking a 45 percent share of the market, followed by the retail sector (where growth has been substantial), entertainment, health, education, industrial and others. Offices have been relatively buoyant, but it is the retail and entertainment sectors where the highest growth has occurred. The market is also benefiting from the growth in airport construction and the many building projects associated with the millennium celebrations.
There are three main types of grids - exposed, concealed and special grids. With growth in the number of bespoke and special ceilings now being specified, special grids have increased their share of the suspended ceiling grid market.
In addition, there are four main types of ceiling tiles - mineral type fibre/board (which is estimated to account for around half of the market), metal, open-cell and plaster.
Together with trading-up to special ceiling systems, there has also been general trading-up in the suspended ceilings market, which has particularly benefited the metal ceiling sector but also plaster to some extent. Mineral fibre/board is still the most widely specified, but together with open-cell ceilings have seen some share decline.
Partitioning systems are valued at approximately £138m and are predominantly used in the office sector and as such are much more reliant on the performance of this market, in terms of construction, refurbishment, relocation and reorganisation.
The market is comprised of three major sectors - Monobloc, operable walls/folding partitions and ‘other’ demountable/relocatable partitions worth £80m. Relocatable partitioning continues to gain share from fixed partitioning as flexibility to reorganise becomes increasingly important.
Similarly to suspended ceilings, there has been trading-up in the relocatable partitioning market. Monobloc partitioning has been used to an increasing degree, particularly in prestigious offices, due mainly to its ease of relocation and due to being fully relocatable. Within the 'other' demountable/relocatable sector, there has been growth in demand for bi-bloc partitioning which is flexible and allows each side of the partition to be decorated differently. Operable walls have also been a relatively buoyant sector, with some growth in acoustic operable walls at the expense of other operable walls/folding partitions.
Trading-up has also occurred in design and material terms. There is increasing specification of timber, glazing in particular and partitioning storage systems.
The short-term future for partitioning systems is optimistic. Much longer term prospects are more pessimistic, due to this sector being greatly affected by changing working practices and the anticipated contraction in the size of head offices.
The distribution structure for these industries is complex due to the wide range of materials involved, the large number of companies and the wide variety of end use sectors, particularly for suspended ceilings.
There are a wide range of companies involved in this market, including raw material suppliers, manufacturers and distributors. The major distributors sell a range of products including those they manufacture themselves and sell under their own brand name, products manufactured by other companies and sold under the distributors own name, and branded ranges from other manufacturers.
In terms of suspended ceilings, major companies are Armstrong World Industries, USG (UK), SAS, Ecophon, CEP Ceilings, Burgess Architectural Products, Illbruck, Rockfon and Hunter Douglas.
In terms of partitioning systems, major suppliers are Komfort Systems, Thrislington, Clestra Hauserman, C P Supplies, Neslo, Unilock, Montage, Optima and Alco Systems.
Major distributors are Commercial Ceiling Factors who lead the market with 29 percent, C P Supplies, Komfort Systems, Ceilings Distribution, Nevill Long and Capco Interior Supplies.
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Text © 1997 AMA Research
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Last updated by Duncan Nottage 12th February 1999