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The UK market for underground pipes increased by 6 percent in 1996 to reach a value of £526 million at manufacturers' selling prices. Moreover, the market for all major material types increased in value terms during 1996. However, the scale of the increases differs significantly.
Over 50 percent of the underground pipes market in value terms in 1996 was accounted for by plastic pipes. Indeed, the market share of plastic pipes has increased significantly during the review period.
The UK ductile iron pipe market is highly dependent on demand from the water supply industry. MSI believe that some 80 percent of ductile iron pipes sold in the UK in 1996 were for use in this sector. Ductile iron pipe manufacturers are expected to face increased competition from plastic pipes in the medium term as stronger plastic pipes are introduced.
Sales of clayware pipes increased modestly in 1996 for a number of reasons. Firstly, clayware pipes have benefited from the lack of confidence expressed by people in the sewerage sector in some plastic sewer pipes. Indeed, at the time of writing three water companies had suspended the use of some plastic sewer pipes. Moreover, the construction industry, which is the main end user of clayware pipes in the UK, has been relatively buoyant, particularly the industrial and commercial new build sector which requires clayware pipes more than other construction sectors.
The UK market for underground concrete pipes has remained relatively stable during the period 1992 to 1996. The main end user of concrete pipes is the sewerage industry. Indeed during the review period, the proportional importance of this industry to the total UK concrete underground pipes market increased to 80 percent in 1996, compared with 75 percent in 1992.
The largest end user of underground pipes in the UK is the water supply industry. This sector has invested significantly during the review period, initially to meet legislative requirements, then more recently to reduce leakage rates which were highlighted by the 1995 drought.
The construction industry has increased expenditure on underground pipes in recent years, particularly in 1994, when house building increased. Moreover, MSI expect that demand from this sector will increase strongly in the medium term.
The sewerage sector is forecast to invest significantly in underground pipes during the period 1997 to 2001. As expenditure by water companies has been focused on clean water projects, expenditure on the sewerage sector has been relatively low in recent years. However, a level of pent up demand is expected to be realised during the forecast period as more attention is given to sewerage replacement.
The telecommunications industry, which almost exclusively uses plastic pipes, has been the main growth market for underground pipes during the five years preceding 1997. Moreover, continued expansion in this market is forecast in the medium term although demand is forecast to peak in the early years of the next century.
Investment by the UK gas supply industry in underground pipes was constrained during the review period because of uncertainty surrounding the separation of the distribution and gas supply businesses of British Gas. The division of British Gas into Centrica and BG, of which TransCo is responsible for the pipeline network, is expected to boost demand from this sector in the medium term.
Demand for underground pipes from the road drainage sector declined between 1994 and 1996 due to reduced investment in new road construction by the government and insufficient investment by the private sector to make up the shortfall. Moreover demand from this sector is expected to continue to decline during the remainder of the century.
MSI believe that many pipe specifiers are conservative in their choice of materials and in many cases prefer to use materials that have proven to be effective in the past. Therefore it can be difficult for new materials to become established in the market and become accepted as materials that are fit for purpose for specific uses.
Text © 1998 MSI
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Last updated by Duncan Nottage 5th March 1999