| AM29013 |
| AMA RESEARCH : Domestic Heating Market UK Market Report 2003. |
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BRIEF DESCRIPTION
| This report presents a review of the market for domestic heating equipment, including coverage of: central heating - boilers, radiators, pumps and controls; space heating - electric, gas, solid fuel; and water heating - gas, electric, storage and solid fuel. The report reviews developments within the industry, with emphasis on both qualitative and quantitative market assessment. Recent trends, key influencing factors and forecasts of future developments are assessed. |
| Of Particular Interest:- |
| Growth prospects for the major domestic heating market end use sectors. |
| Motivation from niche sectors - e.g. the self-build house building market, domestic conservatory and shower markets. |
| Major Distribution Channels. |
| Analysis of key product segments in terms of market size, key suppliers, etc. |
| Key areas of coverage in the report include:- |
| CENTRAL HEATING |
| Central heating systems - market development by volume of central heating installations - history and forecast. Mix by fuel - gas, solid fuel, oil, electric, LPG. Trends for the future and key influencing factors. Ownership levels, penetration by sector, sales by type of application. |
| Boiler market size, trends, market share by mix of fuel, types of boiler (combination, system, wall mounted, floor mounted, back boiler, etc). The continuing trend to combination boilers. Growth of condensing boilers & system boilers, boiler companies, shares, major competitors by sector with key strengths. |
| Radiator market size, volume and value, panel/convector, aluminium/steel, 'designer' radiators. Radiator replacement levels - implications for suppliers, radiator suppliers, shares, strengths and opportunities. Growth of added-value niche sector products. |
| Pump market size, replacement versus new, features, the impact of electronics. The influence of boiler trends on the pump market, pump market shares, key companies. |
| Heating controls, market size and the growing importance of energy efficiency. Key trends by product sector. Product mix. Key competitors. |
| Major suppliers in all sectors, strengths, key characteristics, turnover etc. |
| Distribution of central heating appliances by product. |
| Future prospects. |
| SPACE HEATING |
| Market size, trends and forecasts, reasons for underlying growth/decline, impact of climatic changes. |
| Review of electric space heating product groups - storage heaters, fuel-effect fires, radiant fires, panel heaters, fans and convector heaters etc - assessment of the market size, trends, future prospects, designs etc. |
| Review of gas space heating product groups - fuel-effect fires, wall heaters, etc - market size, trends, future prospects, designs etc. |
| Review of solid fuel and other space heating products. |
| Major manufacturers - factors influencing market position, characteristics etc. |
| Review of distribution by product group - key channels and developments. |
| Future prospects. |
| WATER HEATING |
| Direct gas-fired water heaters, market development, the impact of combination boilers etc. product review - single point/multi point, direct fired water heaters. |
| Cylinder hot water storage market - size and trends, opportunities and threats. |
| Direct versus indirect cylinders. Vented, Unvented. Effects of growth of combination boilers. Growing hot water demands of UK households. |
| Electric water heating - market size and overall trends, domestic market size by product sector and trends by sector, immersion heaters, instantaneous (handwash etc) and thermal storage, major elements of distribution in each sector. |
| Key companies, strengths etc. |
EXECUTIVE SUMMARY
| The overall domestic heating market is estimated to be worth over £1.1 billion in 2002. Improving levels of domestic business and consumer confidence in 1999 prompted positive real growth again with the sector rising by 4% at current prices to a value of just over £1 billion for the first time. However, the lack of significant activity in the new housing market and private RMI in 1999 dampened opportunities for growth in most product sectors. |
| The period 2000 to mid 2003 is characterised by relatively low levels of new house building completions (although housebuilders have been adding value to new build properties), and high levels of home improvement projects with the timing uncertain of the schedule for the additional 4 million new homes by 2016, which is regarded as providing a stimulus for underlying growth. |
| The net effect of these variable influences upon the UK domestic heating market is forecast to result in long term annual growth rates of around 2%. |
| In 2002, the central heating sector is estimated to contribute approximately 65% to the value of the overall domestic heating market. Boilers, at around 54%, represent the largest sector of the central heating market with radiators, pumps and controls, accounting for the remainder. |
| Space heating is estimated to account for around 21% of the total UK domestic heating market, representing a value of around £235 million in 2002. The space heating market consists of electric, gas and solid fuel products, with gas indicated to be the largest sector, contributing around 47% of the market, followed by electrical products and solid fuel. |
| It is estimated that water heating products currently represent around 14% of the UK domestic heating market, consisting of gas water direct, gas water storage and electric water heating. Gas water storage is the largest segment in this sector of the market, currently estimated to account for over 68%. |
| Gas fuel continues to dominate the UK central heating market and is used in the majority of UK households. Oil-fired systems account for a significant proportion of the market with solid fuel estimated to account for a relatively small proportion of the overall market. |
| Wall mounted boilers account for the largest section of the central heating market and are estimated to account for around 72% of the boilers sector. The primary factor driving growth in this area is regarded as the combination boiler, which has been in domestic application use now for over 20 years. Indications are that floor standing boilers have lost share, while back boilers are often replaced like for like, which will continue to sustain the sector in the short, medium and long term. System boilers remain a relatively minor niche product, though are indicated to have performed better than the overall domestic heating market. |
| The development of combustion condensing technology has resulted in improved efficiency levels in general terms across all sectors with condensing combis representing a significant growth area. |
| Historically, the UK boiler market underwent significant consolidation during 2000-2001 reflecting difficult market conditions. Key suppliers in the sector include Baxi, Vaillant, and Caradon, etc. |
| The general performance of the radiator market reflects levels of housing activity, home improvement and is currently viewed as relatively flat or marginally declining in overall terms although the decorative and towel rail sub-sectors are currently demonstrating positive growth trends in 2003. |
| Key suppliers operating in the UK radiator market include Rettig, Caradon Stelrad and Barlo Group. These suppliers are estimated to account for over 75% of UK sales during 2002. |
| Performance in the Pumps sector is influenced by a high level of replacement purchases with prospects for growth despite growing sales in the OEM sector. The UK market for circulating pumps is dominated by 3 key manufacturers the largest of which is Grundfos, followed by Myson and Wilo Salmson. |
| The controls market is driven by a number of key influences such as the increased focus on energy efficiency, cost effectiveness and the desire by consumers to reduce heating costs and increase comfort levels with the minimum of effort. Key suppliers include Honeywell International, Invensys, Siemens, Danfoss and Roxspur. Boiler manufacturers incorporate controls in order to add value by offering fully integrated packages. |
| The distribution of central heating products has been marked by increasing levels of consolidation in the DIY Multiples and builders and plumbers merchants sectors. Key suppliers include Wolseley, B&Q, Homebase, Saint Gobain (Jewson), Travis Perkins, Focus, BSS Group, Grafton Group, Wickes, etc. |
| The space heating sector is estimated to be worth £235 million at msp. The electric storage sector has been in decline for a number of years but is currently 'flattening out'. However, the electric fuel effect fire sector is currently demonstrating positive growth. |
| Gas space heating is estimated to represent around 10% of the total domestic heating market with fuel effect fires the main contributor. This area has benefited in recent years by a return to the fireplace as the focal point for a living room, and indeed the home, in conjunction with increased activity in interior design, stimulated by TV programmes and similar media. Solid fuel fires have also benefited from these trends and offer authenticity and the ambience of the fireside. |
| Key suppliers in space heating sector include Baxi, Glen Dimplex, GDA, Robinson Willey and Leisure Consumer Products amongst others. Distribution trends include a shift to multiple and independent retailers away from Energy suppliers. |
| The gas direct water heating market continues to decline reflecting the growth of combination boilers with the capability of supplying hot water tap/shower systems in addition to the requirements of central heating circuit. However, gas storage has been more positive and contributed to growth in the overall sector. The trend to pressurised unvented systems has continued and has taken share from vented cylindrical storage products. |
| The electric water heating market has continued to grow at levels at, or just above inflation for several years and is estimated to be worth just over £29 million in 2002. The sector includes electric storage, immersion heaters with instantaneous contributing the remainder. |
| Key suppliers include Baxi, Zip Water Heaters (including Solectra), GDA, Gledhill, Vaillant Hepworth, and several other companies. Water heating products are distributed by builders and plumbers merchants, electrical wholesalers and distributors for electrical products. |
COMPANIES COVERED
| Alexander Rose Ltd, Besco Baron, Bridgeman, PJ & Co, Jacobs Young & Westbury Ltd, Keter (UK Ltd, Kettler (GB) Ltd, King Easton Ltd, Leidure Plan Sales & Marketing, Leisuregrow Products Ltd, Li-Lo Leisure Products Ltd, LLC Ltd, Mercer Agencies Ltd, Oasis Leisure Products, Sauvagnat UK, Essex Replica, Castings Ltd, Barlow Tyrie Ltd, Berkeley ForgeBlack Forge Arts, Branson Leisure, Classic Furniture Group Ltd, Cosmo Ltd, Denewood Garden Furniture, Elegant Ltd, Fairweather Trading Ltd, Flaxley Forge (RS Watts & Sons), Gloster Furniture Ltd, Grosfillex UK Ltd, John Robertson Ltd, Konstsmide Uk Ltd, Lister Lutyens Co Ltd, Meadowcraft UK Ltd, Neptune Classics, Norfolk Leisure Company Ltd, Nova Garden Furniture, Pacific Trading, Pine Venture, Pro-Team Sports & Leisure Ltd, |
| Roy Firman Ltd, Scanply International Wood Products Ltd, Stuart Garden Arch, Sundial Ornamental Products, Swan Hattersley Ltd, Teak Antiquity Ltd, The Outdoor Living Trading Co Ltd, The Regent Garden Collection, PJ Bridgman & Company Ltd, F. Peart & Co, Glencrest Seatex, Westminster Teak, Lafuma, Kestrel Trim, Claircraft Industries Pty, Jardine International, Britannic Garden Furniture Ltd, Forest Fencing, Thomas Johnstone Ltd, Indian Ocean Trading Company, Tradewinds Parasol, Grant, Barnet and Company, Char-Broil International, Thermos Ltd, Sunbeam Corporation Inc, Coleman UK, Crosslee plc, Sunshine Lifestyle Products Ltd, The Australian Barbecue Company, OMC, Barbecues Limited, Weber-Stephen Products (UK), Barbecook, Outdoor Chef UK, Flame & Leisure, Fiesta Barbecues, Oz-Style, Magma Products Inc., Chartan Aldred, Big K Charcoal Merchants, Parlour Products, Rectella International Ltd, Plum Products Ltd, Calor Gas, Crosslee, Outdoor Chef, Kirkless, Sierrs Space Heating Ltd, Direct Designs Ltd, Universal Concepts Ltd, Sunnflair, Neptune, La, Hacienda, Kirklees Developments Ltd, Chiminea uk, Abode Chimineas, B & Q, Homebase, Schroder Vetures, Jsainsbury plc, Focus Wickes, Leekes, Trago Mills, Laver, Glyn Webb, Chaplins, Wyevale Garden Centres pl c, Notcutts Ltd, Dobbies, Garden Centres plc, Hillier Nurseries, Squires, Blu Diamond Ltd, Klondyke Garden Centres, Bridgemere Garden World, Blooms of Bressingham plc, Van Hage, Webbs of Wychbold, Stephen H Smith's Garden & Leisure, Haskins Garden Centers, Q Garden Company, Country Homes and Gardens, Ruxley Manor, Great Universal Stores plc, Argos, Marks & Spencer, Debenhams, BHS, John Lewis, Kingfisher Group, Habitat, IKEA, Cargo Homestores Ltd, Mica, Wilkinsons, Home Hardware. |
TABLE OF CONTENTS
| 1. INTRODUCTION 7 |
| 2. SUMMARY 8 |
| 2.1 OVERALL MARKET 8 |
| 2.2 PRODUCT MIX 9 |
| 2.3 CENTRAL HEATING 10 |
| 2.4 SPACE HEATING 11 |
| 2.5 WATER HEATING 12 |
| 3. KEY MARKET INFLUENCES - MACRO AND MICRO 13 |
| 3.1 MACRO-ECONOMIC INFLUENCES 13 |
| 3.1.1 GDP 13 |
| 3.1.2 Inflation & Interest Rates 14 |
| 3.1.3 Unemployment & Consumer Spending 15 |
| 3.1.4 Consumers Disposable Income Levels And Savings 16 |
| 3.1.5 Population 17 |
| 3.2 THE HOUSING MARKET 18 |
| 3.2.1 New House Build 18 |
| 3.2.2 House Moving Levels 20 |
| 3.2.3 Household Demographics 20 |
| 3.3 THE SELF BUILD MARKET 21 |
| 3.4 DOMESTIC CONSERVATORIES 23 |
| 3.5 The UK Shower Market 25 |
| 3.6 CONCLUSIONS AND FUTURE PROSPECTS 27 |
| 4. DOMESTIC CENTRAL HEATING 30 |
| 4.1 CENTRAL HEATING SYSTEMS 30 |
| 4.1.1 Definition 30 |
| 4.1.2 Installations 30 |
| 4.1.3 Fuels 31 |
| 4.1.4 Establishment 33 |
| 4.1.5 Replacement, New Build and First Time Installations 35 |
| 4.2 DOMESTIC CENTRAL HEATING BOILERS 37 |
| 4.2.1 Definition 37 |
| 4.2.2 Market Size 37 |
| 4.2.3 Mix Of Boilers 40 |
| 4.2.4 Types Of Boiler 42 |
| 4.2.5 Gas Boilers 43 |
| 4.2.6 Other Boilers 47 |
| 4.2.7 Companies 48 |
| 4.3 OTHER SYSTEMS 52 |
| 4.4 RADIATORS 55 |
| 4.4.1 Market 55 |
| 4.4.2 Mix of Radiator Sales 58 |
| 4.4.3 Trends 59 |
| 4.4.4 Market Share 62 |
| 4.4.5 Imports and Exports 64 |
| 4.5 PUMPS 65 |
| 4.5.1 Market Size 65 |
| 4.5.2 Mix of Glandless Circulator Sales 66 |
| 4.5.3 Trends 68 |
| 4.5.4 Market Shares 69 |
| 4.6 CONTROLS 70 |
| 4.6.1 Definition 70 |
| 4.6.2 Market 70 |
| 4.6.3 Product Mix 72 |
| 4.6.4 Major Competitors 76 |
| 4.7 DISTRIBUTION 77 |
| 4.7.1 Product Distribution 77 |
| 4.7.2 Distribution Channels 78 |
| 4.8 FUTURE PROSPECTS 83 |
| 5. SPACE HEATING 85 |
| 5.1 MARKET SIZE 85 |
| 5.1.1 Definition 85 |
| 5.1.2 Market Size 85 |
| 5.2 PRODUCT MIX 87 |
| 5.3 ELECTRIC SPACE HEATING 90 |
| 5.3.1 Products 90 |
| 5.3.2 Suppliers 94 |
| 5.3.3 Distribution 96 |
| 5.4 GAS SPACE HEATING PRODUCTS 97 |
| 5.4.1 Products 97 |
| 5.4.2 Suppliers 99 |
| 5.4.3 Distribution 100 |
| 5.5 SOLID FUEL ROOM HEATERS 101 |
| 5.6 IMPORTS & EXPORTS 102 |
| 5.7 FUTURE PROSPECTS 102 |
| 6. WATER HEATING 105 |
| 6.1 DIRECT GAS-FIRED WATER HEATERS 105 |
| 6.1.1 Definition 105 |
| 6.1.2 Market Size 105 |
| 6.1.3 Products 106 |
| 6.1.4 Companies 108 |
| 6.1.5 Imports & Exports 108 |
| 6.1.6 Distribution 108 |
| 6.2 GAS WATER HEATING - STORAGE 109 |
| 6.2.1 Definition 109 |
| 6.2.2 The Market 109 |
| 6.2.3 Products 110 |
| 6.2.4 Suppliers 112 |
| 6.2.5 Distribution 113 |
| 6.3 ELECTRIC WATER HEATING 113 |
| 6.3.1 Definition 113 |
| 6.3.2 Market Size 113 |
| 6.3.3 Products 115 |
| 6.3.4 Suppliers 116 |
| 6.3.5 Distribution 117 |
| 6.4 FUTURE PROSPECTS 117 |
DIAGRAMS
| TABLES & CHARTS |
| TABLE 1 UK MARKET FOR GARDEN LEISURE (£ MILLION) AT RSP -1995 TO 2006 7 |
| CHART 2 UK MARKET FOR GARDEN LEISURE 2001 - VALUE MIX BY PRODUCT TYPE 8 |
| TABLE 3 GDP PERCENTAGE CHANGE PER ANNUM 1980-2004 11 |
| CHART 4 INTEREST RATES AND INFLATION (RPI) FROM 1990-2003 12 |
| CHART 5 PDI & SAVINGS RATIO 14 |
| CHART 6 NUMBER OF EMPLOYEES IN EMPLOYMENT GB - JUNE 1981-01 (MILLIONS) 15 |
| CHART 7 AGE DISTRIBUTION OF THE RESIDENT UK POPULATION 1998 ('000) 16 |
| TABLE 8 HOUSEBUILDING COMPLETIONS (000'S DWELLINGS) 1990-2005 IN GB 18 |
| TABLE 9 HOUSING STARTS 1994-2005 IN GREAT BRITAIN BY SECTOR ('000) 19 |
| TABLE 10 NUMBER OF PROPERTY TRANSACTIONS IN ENGLAND AND WALES 1994-2002 20 |
| TABLE 11 STOCK OF DWELLINGS IN GREAT BRITAIN 1971-2000 21 |
| TABLE 12 THE UK DOMESTIC GARDEN FURNITURE MARKET £ MILLION AT RSP - 1995-2002 24 |
| TABLE 13 THE UK MARKET FOR GARDEN FURNITURE 2001-2006 £ MILLION RSP 30 |
| CHART 14 UK GARDEN FURNITURE MARKET CONSTANT 1995 PRICES 33 |
| CHART 15 UK GARDEN FURNITURE - PENETRATION OF HOUSEHOLDS 34 |
| TABLE 16 UK MIX OF GARDEN FURNITURE - BY VALUE 2001 38 |
| TABLE 17 GARDEN FURNITURE PRODUCT MIX 1990 TO 2001 - % BY VALUE 39 |
| CHART 18 GARDEN FURNITURE MARKET - MIX BY TYPE OF MATERIAL 1990 TO 2001 43 |
| CHART 19 UK SEASONALITY OF GARDEN FURNITURE SALES 46 |
| TABLE 20 SOME KEY COMPANIES & MATERIALS(S) USED 49 |
| TABLE 21 UK DOMESTIC GARDEN FURNITURE MARKET 2001 - MARKET SHARE 52 |
| TABLE 22 UK BARBECUE UNIT MARKET - VOLUME & VALUE £ MILLION AT RSP - 1995 TO 2006 64 |
| CHART 23 UK BARBECUE MARKET AT CONSTANT 1995 PRICES 68 |
| CHART 24 UK HOUSEHOLD PENETRATION OF BARBECUES 70 |
| TABLE 25 UK HOUSEHOLD PENETRATION BY TYPE OF BARBECUE 72 |
| TABLE 26 MIX OF PENETRATION OF BARBECUE TYPES - % BY VOLUME 1990 TO 2001 72 |
| TABLE 27 UK MIX OF BARBECUES SOLD DURING 2001* 74 |
| CHART 28 UK MIX BY VALUE OF BBQS - 1990 TO 2001 75 |
| CHART 29 UK SEASONALITY OF BARBECUE UNIT SALES TO CONSUMERS 78 |
| TABLE 30 UK BARBECUE SUPPLIERS MARKET SHARES 2001 79 |
| TABLE 31 UK BARBECUE/PATIO ACCESSORY MARKET - 1995 TO 2006 (£ MILLION RSP) 86 |
| TABLE 32 THE UK DOMESTIC GAS PATIO HEATER MARKET £ MILLION AT RSP - 1999-2003 91 |
| TABLE 33 UK DISTRIBUTION CHANNEL SHARES FOR GARDEN FURNITURE AND BARBECUES 2001 % BY VALUE 97 |
| CHART 34 DIY MULTIPLES GARDEN PRODUCT MARKET 2001 - SHARE BY MULTIPLE 98 |
Text © 2003 AMA Research
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Last updated by Amanda Porteous 2003
