The home decor market is highly dependent on the performance of the housing market and on consumer income and confidence. A complex range of factors are therefore pertinent including economic influences (such as inflation, taxation, interest rates, mortgage rates and house prices) and political and social factors (such as government policy, demographics and housing demand).

The increase in home owneroccupation has been a major force in driving the home decor market. The present proportion of mortgages, or outright owners is around 67 percent which means that the majority of the population has a financial interest in their homes.

The recession had a major impact on the whole market, as it resulted in a slowdown in housing activity in terms of both house building and house moving, with the housing market a major motivating factor for the purchase of home decor products. Other factors resulting in fewer purchases included an increase in savings as consumer confidence fell and personal disposable income (PDI) grew at lower levels.

The market overall experienced some recovery in 1993 and 1994 as gross domestic product (GDP) growth reached 4 percent in 1994 and factors such as increasing housing starts and house moving, and a decline in unemployment led to greater consumer confidence and in turn, increased purchasing.

The home decor market is worth over £2,600 million at manufacturers selling price (MSP) the largest sector being carpeting with over 50 percent of the market, followed by window coverings with 24 percent and smooths, ceramics and wallcoverings each accounting for 8 percent.

The carpet market in the UK was worth approximately £1,350 million in 1996 at MSP, representing 272 million sq. metres. Import penetration is gradually increasing and in 1995 was 37 percent of the market by value, although much higher in volume terms due to the low value products being imported from countries such as Belgium/Luxembourg. This is a mature market and major growth is unlikely, however, there has been a gradual recovery from the poor market conditions experienced during the recession, with some recovery also in average prices. Major carpet sectors include tufted, woven, needlepunch and 'others' which include non-woven and alternative carpets.

The market for smooth floorcoverings includes vinyls, wood and cork. In 1996, total vinyls were worth around £178 million of which 38 percent are in the domestic market. This domestic market is made up of 3 types of vinyls - cushioned sheeting which takes 76 percent of the market, vinyl tiles and uncushioned sheeting. The domestic vinyls market is not performing well with low price levels resulting from oversupply.

In terms of wood, the market is growing but high prices may result in greater growth of less expensive laminated wooden floorcoverings.

The market for both ceramic wall and floor tiles saw rapid growth in the 1980s, but declined sharply during the recession with some slow recovery in the last few years. In 1996, the total market was worth £214 million. It is estimated that around 55 percent of this market in value terms is in the domestic market. The total market is heavily weighted towards wall tiles and although floor tiles are increasing in popularity, they are unlikely to become a major sector of the market due mainly to our climate.

The market for wallcoverings experienced some recovery from 1991 through to 1993, fell again in 1994 and 1995 to be followed by some recovery in 1996 to £214 million at MSP. The wallcoverings market is made up of six major sectors with borders the only sector being relatively buoyant.

Window coverings, includes curtains, blinds, net curtains and tracks and poles. The market experienced some decline during the recessionary period with 1994 and 1995 recovering to some extent. Ready-made curtains and blinds have been relatively buoyant while nets, curtain fabric and custom-made curtains have suffered to a varying degree. Overall, the market for domestic window coverings was worth just over £600 million at MSP in 1996.

MAPS commissioned an exclusive the National Opinion Poll (NOP) survey into planned purchasing of home decor products within the next year. This repeated a survey carried out in 1995. Comparison of the responses from 1993, 1995 and 1996 of potential purchasers show that intended purchase levels have greatly increased even from a year and half ago as consumers confidence has experienced recent recovery.

Women are more likely to be planning purchases of home decor products than men, reflecting their traditional responsibilities for the home. The only exceptions are for ceramic wall tiles and vertical and Venetian blinds for which males have slightly greater intention to buy. The major purchasers by age are amongst those most likely to be buying and improving their homes, i.e. ages between 25 and 54.

Home decor is a highly fragmented industry, with very little vertical integration. No single manufacturer or supplier holds a dominant position in the context of the overall industry, although there are companies which are significant within each market. Some industries are highly fragmented e.g. the carpet market, while UK supply of both ceramic tiles and vinyl floorcoverings is highly concentrated.

Manufacturers within any one sector do not usually produce products in another sector, mainly because there is no common ground in the manufacturing processes. Similarly, manufacturers do not move into retailing in this market. However, a number of retailers have set up vertically integrated operations, where starting from their retail base, they set up or buy in manufacturing facilities to produce home decor products for their ranges.

As well as retail brands, there are several major branded products within the home decor market, however, it is recognised that most consumers do not buy brand names - they buy colour, design and price.

The majority of advertising is in localregional papers, national women'shome decor magazines and door-to-door leaflet drops. Major advertisers are DIY Multiples, which jointly spent around £69 million on media in 1995.

In terms of distribution, these products have a number of channels in common. These include DIY stores which are a major outlet for the purchase of home decor products with the exception of curtains and fabric, departmentvariety stores including the Co-operative, mail order and, for some products, builders merchants.

However, many of these products have specialist stores which are often major outlets including interior design shops, blind specialists, ceramic tile specialists and carpet specialists. These all concentrate on particular products.

The prime determinants of the future performance of the market are the economy in general, the housing market and continuing interest in home decor. Consumer confidence will be critical in the short term with significant longer term factors including demographics and social elements.