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MP26008

MAPS CONSERVATORIES & DOUBLE GLAZING 1998

Overview

Table of Contents

Executive Summary

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EXECUTIVE SUMMARY

The domestic glazing market, incorporating windows, doors and conservatories is worth around £3 billion at retail prices in 1997. After a difficult trading period in the early 1990s, the market has experienced some recovery in fortunes since 1995, but is still well below the peak levels of the late 1980s in real terms.

The prospects for the domestic glazing market are primarily dependent upon the level of activity in the construction industry in general, and the housing market in particular, which in turn are heavily influenced by general macro-economic factors. The underlying scenario at present is a period of sustained economic growth, primarily based on a strong year of consumer spending in 1997.

A key feature of the economic recovery, however, over the last 5 years, is the relatively minimal contribution and impact on construction. The boom period of the late 1980s in the housing market, resulted in such a strong slump in the sector’s fortunes that recovery has either been ‘patchy’ or non-existent until the last 12 months. The cause of the downturn was the sharp fall in house prices, particularly in Southern England, which resulted in negative equity and restricting homeowners ability to relocate for several years.

However, 1996-97 has finally seen some recovery in house prices which has resulted in an upturn in both new housing output and house moving levels. The effect of these improvements has been felt in the domestic glazing industry with an upturn in demand for new housing requirements and in the replacement sector.

Conservatories are also included in this report and the demand in this sector has been very buoyant, despite their high retail price and the depressed level of consumer spending. Conservatories differ from doors and windows in that they are a desirable ‘lifestyle’ product, rather than a ‘necessary’ or often ‘distress’ purchase as a result of draughty or rotten frames. Sales of conservatories have increased by over 75 percent since 1990 reflecting growing awareness and interest in the product. Increasing specification standards have also contributed to their growing appeal and appreciation of their wider usage. While 20 years ago, they were generally regarded as a ‘summer room’ and somewhere to relax with a cup of coffee for half an hour, the use of double glazing makes them a ‘year round’ extension to the home.

Changing use of frame materials has been a major feature of the glazing market over the last decade. In the replacement windows market, timber usage has declined rapidly with PVCu now accounting for around 80 percent of the market. Aluminium’s share of the window market has also declined rapidly and now accounts for less than 10 percent of demand.

In the door sector of the market, however, aluminium and timber retain higher shares due to the structural strengths of aluminium and the traditional appeal of hardwood front doors.

The major change in the glazing industry in the last few years has been the new housing sector, which is experiencing a rapid switch away from timber to PVCu. Growing awareness amongst house buyers of the longer term low maintenance benefits of PVCu, coupled with the erosion of the cost differential between the two materials, has resulted in more national house builders switching to PVCu.

As part of the research process, Market Assessment commissioned NOP Solutions to undertake an independent assessment of a sample of householders purchasing intentions across a range of glazing products. PVCu windows were regarded as the highest priority with 8 percent of respondents indicating their intention to purchase over the next 12 months. Timber front doors were also a priority for 6 percent of householders, with a PVCu conservatory also relatively high on the list at 3 percent. Aluminium doors and windows were the lowest priorities with only 1 percent of respondents expressing any intention to purchase these products, though there was generally a higher preference for aluminium in the South East of England.

In terms of the supply structure for glazing products, there are no authoritative statistics on the number of companies involved in this sector. However, it is generally agreed there are well over 2,000 retailers & installers of windows ranging from leading national companies to a large number of local, family-based installers. Anglian Windows are generally recognised as market leaders in the replacement market with an estimated 9 percent share, followed by Everest, Zenith, Aspen Windows etc. Some 75 percent of the market is supplied by small independent companies, operating within their local area.

In the timber market John Carr are now clear market leaders following their acquisition of their major competitor, Boulton & Paul, in 1997. Other leading suppliers in the timber market are Magnet and Premdor (formerly owned by Spring Ram). The decline of timber as a glazing material is likely to result in further rationalisation in this sector.

The supply and distribution of conservatories is quite similar to the window market and is dominated by replacement window companies. However, the DIY sector is much stronger in the conservatory market with Wickes and B&Q particularly prominent in the sector, supplied by major manufacturers such as BHD. Garden Centres were a major distribution outlet for conservatories, but share has declined substantially over the last 10 years as a result of the growth of PVCu supplied by replacement window companies.

Prospects for the industry in the future are relatively optimistic, at least in the short term. Consumer spending remains buoyant and new housing and house moving levels are both on upward trends. Attempts by the Government and the Bank of England to dampen down consumer spending through higher interest rates must have some negative impact on the housing market, but there are no immediate signs of any significant downturn to date.

Demand for doors and windows are forecast to grow by around 3 percent per annum over the next two years, though prices remain very competitive. Conservatories, however are forecast to enjoy higher rates of growth at around 5 percent per annum, due to rising consumer confidence and disposable income levels, and the relatively low household ownership levels at less than 10 percent.

PVCu’s share of the replacement market is relatively mature, but the material is forecast to take further share in the new housing sector as more homeowners demand the low maintenance benefits when buying a new house.

Text © 1998 MAPS

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