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Quarterly Trend Report
Sales are down but Fabricators remain confident
Sales, quarter-on-quarter
Twenty-two per cent of fabricators increased sales in January to March, 41% saw a drop and 37% reported no change.The difference between the number of companies reporting an increase over those reporting a decrease is the net balance, expressed as a percentage. A positive net balance indicates growth. A net balance of zero implies that little has changed.
On this basis, a net -19% of fabricators reported a fall in sales in the last three months compared with three months ago (chart 1).
More firms in the North (-32%) saw sales drop over the period than companies in the South (-25%). Fabricators in the Midlands increased sales (4%). A net 6% of large fabricators saw sales grow, contrasting with small firms who reported a decline (-36%). Mid-sized companies saw little change.
January-March 2005 sales compared with the previous three months - by size
| SIZE | Increase | Decrease | Same | Total | Base |
| Small | 15% | 51% | 34% | 100% | 55 |
| Medium | 32% | 32% | 36% | 100% | 28 |
| Large | 29% | 24% | 47% | 100% | 17 |
| Total | 22% | 41% | 37% | 100% | 100 |
January-March 2005 sales compared with the previous three months - by area
| Area | Increase | Decrease | Same | Total | Base |
| South | 22% | 48% | 30% | 100% | 40 |
| Midlands | 28% | 24% | 48% | 100% | 29 |
| North | 16% | 48% | 36% | 100% | 31 |
| Total | 22% | 41% | 37% | 100% | 100 |
Sales, year-on-year
A net -6% of fabricators saw sales drop in the last three months compared with the same period in 2004 (chart 2). Firms in the South reported the most widespread drop (-35%) compared with companies in the North (-7%). Fabricators in the Midlands increased sales (36%). Firms of all sizes experienced a decline.Looking at business type, both trade and retail firms saw sales fall (-14%) whilst commercial fabricators reported little change.
Mix of Business
Twenty per cent of windows and doors manufactured this quarter went into conservatories (chart 3).
Stocks
A net -1% of window companies cut stocks compared with three months ago. Large firms (13%) and fabricators in the South and Midlands (4%) increased stocks, contrasting with mid-sized companies (-11%) and fabricators in the North (-13%). Small firms reported little change.
Employment
A net 3% of window fabricators took on new staff in the last three months (chart 4). Large firms (18%) were most active in recruiting. Fabricators in the North (-7%) and mid-sized firms (-11%) cut back.
Orders
A balance of just under one in five fabricators reported fuller order books compared with three months ago (chart 5). A net 44% of fabricators in the Midlands saw a rise in orders compared with 13% in the North and 2% in the South. Significantly more large firms (53%) reported an increase in orders than mid-sized (18%) or small companies (7%).
Capacity
Only thirty-one per cent of window fabricators are currently working at capacity (chart 6).
Raw materials
Almost seven in ten fabricators report a rise in the cost of raw materials (chart 7). Firms in the North (77%) and small and mid-sized companies (75%) were most affected.
Prices
A net 11% of firms raised prices compared with 3 months ago (chart 7). Large companies (29%) were the most confident in passing on increased prices. A net -20% of trade fabricators dropped prices compared with commercial (23%) and retail firms (11%).
Price expectations
Just under a net one in two fabricators expect to increase selling prices in the next 12 months compared with the previous 12 months. Expectations are strong across fabricators of all sizes and in all regions.
Investment intentions
Overall a net 18% of firms plan to invest in machinery or buildings in the next 12 months compared with the previous 12 months (chart 8). A net 29% of large companies plan to spend more over the period compared with 17% of small firms and 14% of mid-sized fabricators. Significantly, more fabricators in the Midlands (28%) and North (23%) intend to invest more over the next year than firms in the South (8%).
Outlook
A net 70% of fabricators expect sales to increase over the next three months compared with the previous three months. This outlook is reflected among fabricators in the South (78%) and Midlands (73%) and among small firms (76%). Trade (73%) and retail (89%) fabricators are notably more optimistic than commercial firms (32%).Year-on-year forecasts are also still positive, with a net 43% of companies expecting a rise in the next 3 months compared with the same period last year (chart 9). A net 71% of companies in the Midlands anticipate sales growth compared with 32% in the South and North. More large companies (65%) forecast better sales than medium or small firms (43% and 37% respectively).
Prospects
Despite a drop in sales, a net 25% of fabricators are more confident now about the overall prospects for the window industry than 3 months ago (chart 10). Firms in the Midlands (38%) are more positive than other regions.Mid-sized firms (39%) and large companies (29%) are more optimistic than small fabricators (16%).
Profitability
A net 32% of fabricators expect higher profits over the next 12 months compared with the previous 12 months. Firms in the Midlands (54%) and large companies (75%) are particularly confident. By business type, commercial fabricators (40%) are more positive than trade or retail firms (24%).
Problems
The main problems facing fabricators in the last three months were supplier price rises (59%), margin squeeze (50%) and low sales volume (49%).The single biggest problem was supplier price rises mentioned by 18% of fabricators. Only 7% of fabricators reported no problems compared with 19% in the previous quarter's survey.
Comment
“There is no doubt that the direct sell market, particularly in Southern England, is having one of its toughest times of the last fifteen years,” comments Winston Duguid, Managing Director of WHS Halo, who sponsor this report. “Anybody reliant on this market segment, who hasn't yet, needs to batten down the hatches and concentrate on the basics of customer satisfaction, quality and service. But the smarter operators should not despair. Although the window market is affected by maturity the other big-ticket home improvement items in the High Street are all suffering. In a really good year 4% of British households used to replace their windows; we are going to have to accept that now and in the future only 2% of British households will replace their windows - but this still means a market with an installed value of over £1.5 billion per annum, worth 5.5 million windows per annum with conservatories on top.“The whole supply chain will need to adapt to this change and it is inevitable that certain players from extruder through to fabricator and installer will be casualties. With oil continuing to stay high, and possibly advance beyond $55 per barrel, the selling prices of some extruders are simply unsustainable. We should expect a further reduction in the number of extrusion companies in 2005 and some exits could be abrupt. But there are and will be ways in which businesses can grow profitability. Good direct sell installers have already broadened their product portfolio into roofline and conservatories. The emphasis on U values and building regulations opens up other areas of home improvements where window installers are best placed to exploit. Consumer expenditure will continue to be tight in the immediate future but there remain enormous opportunities for those that recognise their company's strengths and are prepared to make them into greater strengths.”
|
The WHS Halo Report, a quarterly trends survey, is produced by Michael Rigby Associates and sponsored by WHS Halo in conjunction with Fabrication and Glazing Industries. The aim is to keep a finger on the market pulse, and to monitor fabricators' views and expectations of market movements. The survey covers a representative sample of 100 window fabricators. Telephone interviews took place between the 4th and 12th April 2005 across a balanced spread of size of firm, geographical area and type of fabricator. Numbers employed was used as an indication of company size. The categories are small (1-19 employees), medium (20-49) and large (over 50 employees).
© Copyright Michael Rigby Associates 2005 |
Quarterly Trend Report
Sales are down but Fabricators remain confident
Sales, quarter-on-quarter
Twenty-two per cent of fabricators increased sales in January to March, 41% saw a drop and 37% reported no change.The difference between the number of companies reporting an increase over those reporting a decrease is the net balance, expressed as a percentage. A positive net balance indicates growth. A net balance of zero implies that little has changed.
On this basis, a net -19% of fabricators reported a fall in sales in the last three months compared with three months ago (chart 1).
More firms in the North (-32%) saw sales drop over the period than companies in the South (-25%). Fabricators in the Midlands increased sales (4%). A net 6% of large fabricators saw sales grow, contrasting with small firms who reported a decline (-36%). Mid-sized companies saw little change.
January-March 2005 sales compared with the previous three months - by size
| SIZE | Increase | Decrease | Same | Total | Base |
| Small | 15% | 51% | 34% | 100% | 55 |
| Medium | 32% | 32% | 36% | 100% | 28 |
| Large | 29% | 24% | 47% | 100% | 17 |
| Total | 22% | 41% | 37% | 100% | 100 |
January-March 2005 sales compared with the previous three months - by area
| Area | Increase | Decrease | Same | Total | Base |
| South | 22% | 48% | 30% | 100% | 40 |
| Midlands | 28% | 24% | 48% | 100% | 29 |
| North | 16% | 48% | 36% | 100% | 31 |
| Total | 22% | 41% | 37% | 100% | 100 |
Sales, year-on-year
A net -6% of fabricators saw sales drop in the last three months compared with the same period in 2004 (chart 2). Firms in the South reported the most widespread drop (-35%) compared with companies in the North (-7%). Fabricators in the Midlands increased sales (36%). Firms of all sizes experienced a decline.Looking at business type, both trade and retail firms saw sales fall (-14%) whilst commercial fabricators reported little change.
Mix of Business
Twenty per cent of windows and doors manufactured this quarter went into conservatories (chart 3).
Stocks
A net -1% of window companies cut stocks compared with three months ago. Large firms (13%) and fabricators in the South and Midlands (4%) increased stocks, contrasting with mid-sized companies (-11%) and fabricators in the North (-13%). Small firms reported little change.
Employment
A net 3% of window fabricators took on new staff in the last three months (chart 4). Large firms (18%) were most active in recruiting. Fabricators in the North (-7%) and mid-sized firms (-11%) cut back.
Orders
A balance of just under one in five fabricators reported fuller order books compared with three months ago (chart 5). A net 44% of fabricators in the Midlands saw a rise in orders compared with 13% in the North and 2% in the South. Significantly more large firms (53%) reported an increase in orders than mid-sized (18%) or small companies (7%).
Capacity
Only thirty-one per cent of window fabricators are currently working at capacity (chart 6).
Raw materials
Almost seven in ten fabricators report a rise in the cost of raw materials (chart 7). Firms in the North (77%) and small and mid-sized companies (75%) were most affected.
Prices
A net 11% of firms raised prices compared with 3 months ago (chart 7). Large companies (29%) were the most confident in passing on increased prices. A net -20% of trade fabricators dropped prices compared with commercial (23%) and retail firms (11%).
Price expectations
Just under a net one in two fabricators expect to increase selling prices in the next 12 months compared with the previous 12 months. Expectations are strong across fabricators of all sizes and in all regions.
Investment intentions
Overall a net 18% of firms plan to invest in machinery or buildings in the next 12 months compared with the previous 12 months (chart 8). A net 29% of large companies plan to spend more over the period compared with 17% of small firms and 14% of mid-sized fabricators. Significantly, more fabricators in the Midlands (28%) and North (23%) intend to invest more over the next year than firms in the South (8%).
Outlook
A net 70% of fabricators expect sales to increase over the next three months compared with the previous three months. This outlook is reflected among fabricators in the South (78%) and Midlands (73%) and among small firms (76%). Trade (73%) and retail (89%) fabricators are notably more optimistic than commercial firms (32%).Year-on-year forecasts are also still positive, with a net 43% of companies expecting a rise in the next 3 months compared with the same period last year (chart 9). A net 71% of companies in the Midlands anticipate sales growth compared with 32% in the South and North. More large companies (65%) forecast better sales than medium or small firms (43% and 37% respectively).
Prospects
Despite a drop in sales, a net 25% of fabricators are more confident now about the overall prospects for the window industry than 3 months ago (chart 10). Firms in the Midlands (38%) are more positive than other regions.Mid-sized firms (39%) and large companies (29%) are more optimistic than small fabricators (16%).
Profitability
A net 32% of fabricators expect higher profits over the next 12 months compared with the previous 12 months. Firms in the Midlands (54%) and large companies (75%) are particularly confident. By business type, commercial fabricators (40%) are more positive than trade or retail firms (24%).
Problems
The main problems facing fabricators in the last three months were supplier price rises (59%), margin squeeze (50%) and low sales volume (49%).The single biggest problem was supplier price rises mentioned by 18% of fabricators. Only 7% of fabricators reported no problems compared with 19% in the previous quarter's survey.
Comment
“There is no doubt that the direct sell market, particularly in Southern England, is having one of its toughest times of the last fifteen years,” comments Winston Duguid, Managing Director of WHS Halo, who sponsor this report. “Anybody reliant on this market segment, who hasn't yet, needs to batten down the hatches and concentrate on the basics of customer satisfaction, quality and service. But the smarter operators should not despair. Although the window market is affected by maturity the other big-ticket home improvement items in the High Street are all suffering. In a really good year 4% of British households used to replace their windows; we are going to have to accept that now and in the future only 2% of British households will replace their windows - but this still means a market with an installed value of over £1.5 billion per annum, worth 5.5 million windows per annum with conservatories on top.“The whole supply chain will need to adapt to this change and it is inevitable that certain players from extruder through to fabricator and installer will be casualties. With oil continuing to stay high, and possibly advance beyond $55 per barrel, the selling prices of some extruders are simply unsustainable. We should expect a further reduction in the number of extrusion companies in 2005 and some exits could be abrupt. But there are and will be ways in which businesses can grow profitability. Good direct sell installers have already broadened their product portfolio into roofline and conservatories. The emphasis on U values and building regulations opens up other areas of home improvements where window installers are best placed to exploit. Consumer expenditure will continue to be tight in the immediate future but there remain enormous opportunities for those that recognise their company's strengths and are prepared to make them into greater strengths.”
|
The WHS Halo Report, a quarterly trends survey, is produced by Michael Rigby Associates and sponsored by WHS Halo in conjunction with Fabrication and Glazing Industries. The aim is to keep a finger on the market pulse, and to monitor fabricators' views and expectations of market movements. The survey covers a representative sample of 100 window fabricators. Telephone interviews took place between the 4th and 12th April 2005 across a balanced spread of size of firm, geographical area and type of fabricator. Numbers employed was used as an indication of company size. The categories are small (1-19 employees), medium (20-49) and large (over 50 employees).
© Copyright Michael Rigby Associates 2005 |
Quarterly Trend Report
Sales are down but Fabricators remain confident
Sales, quarter-on-quarter
Twenty-two per cent of fabricators increased sales in January to March, 41% saw a drop and 37% reported no change.The difference between the number of companies reporting an increase over those reporting a decrease is the net balance, expressed as a percentage. A positive net balance indicates growth. A net balance of zero implies that little has changed.
On this basis, a net -19% of fabricators reported a fall in sales in the last three months compared with three months ago (chart 1).
More firms in the North (-32%) saw sales drop over the period than companies in the South (-25%). Fabricators in the Midlands increased sales (4%). A net 6% of large fabricators saw sales grow, contrasting with small firms who reported a decline (-36%). Mid-sized companies saw little change.
January-March 2005 sales compared with the previous three months - by size
| SIZE | Increase | Decrease | Same | Total | Base |
| Small | 15% | 51% | 34% | 100% | 55 |
| Medium | 32% | 32% | 36% | 100% | 28 |
| Large | 29% | 24% | 47% | 100% | 17 |
| Total | 22% | 41% | 37% | 100% | 100 |
January-March 2005 sales compared with the previous three months - by area
| Area | Increase | Decrease | Same | Total | Base |
| South | 22% | 48% | 30% | 100% | 40 |
| Midlands | 28% | 24% | 48% | 100% | 29 |
| North | 16% | 48% | 36% | 100% | 31 |
| Total | 22% | 41% | 37% | 100% | 100 |
Sales, year-on-year
A net -6% of fabricators saw sales drop in the last three months compared with the same period in 2004 (chart 2). Firms in the South reported the most widespread drop (-35%) compared with companies in the North (-7%). Fabricators in the Midlands increased sales (36%). Firms of all sizes experienced a decline.Looking at business type, both trade and retail firms saw sales fall (-14%) whilst commercial fabricators reported little change.
Mix of Business
Twenty per cent of windows and doors manufactured this quarter went into conservatories (chart 3).
Stocks
A net -1% of window companies cut stocks compared with three months ago. Large firms (13%) and fabricators in the South and Midlands (4%) increased stocks, contrasting with mid-sized companies (-11%) and fabricators in the North (-13%). Small firms reported little change.
Employment
A net 3% of window fabricators took on new staff in the last three months (chart 4). Large firms (18%) were most active in recruiting. Fabricators in the North (-7%) and mid-sized firms (-11%) cut back.
Orders
A balance of just under one in five fabricators reported fuller order books compared with three months ago (chart 5). A net 44% of fabricators in the Midlands saw a rise in orders compared with 13% in the North and 2% in the South. Significantly more large firms (53%) reported an increase in orders than mid-sized (18%) or small companies (7%).
Capacity
Only thirty-one per cent of window fabricators are currently working at capacity (chart 6).
Raw materials
Almost seven in ten fabricators report a rise in the cost of raw materials (chart 7). Firms in the North (77%) and small and mid-sized companies (75%) were most affected.
Prices
A net 11% of firms raised prices compared with 3 months ago (chart 7). Large companies (29%) were the most confident in passing on increased prices. A net -20% of trade fabricators dropped prices compared with commercial (23%) and retail firms (11%).
Price expectations
Just under a net one in two fabricators expect to increase selling prices in the next 12 months compared with the previous 12 months. Expectations are strong across fabricators of all sizes and in all regions.
Investment intentions
Overall a net 18% of firms plan to invest in machinery or buildings in the next 12 months compared with the previous 12 months (chart 8). A net 29% of large companies plan to spend more over the period compared with 17% of small firms and 14% of mid-sized fabricators. Significantly, more fabricators in the Midlands (28%) and North (23%) intend to invest more over the next year than firms in the South (8%).
Outlook
A net 70% of fabricators expect sales to increase over the next three months compared with the previous three months. This outlook is reflected among fabricators in the South (78%) and Midlands (73%) and among small firms (76%). Trade (73%) and retail (89%) fabricators are notably more optimistic than commercial firms (32%).Year-on-year forecasts are also still positive, with a net 43% of companies expecting a rise in the next 3 months compared with the same period last year (chart 9). A net 71% of companies in the Midlands anticipate sales growth compared with 32% in the South and North. More large companies (65%) forecast better sales than medium or small firms (43% and 37% respectively).
Prospects
Despite a drop in sales, a net 25% of fabricators are more confident now about the overall prospects for the window industry than 3 months ago (chart 10). Firms in the Midlands (38%) are more positive than other regions.Mid-sized firms (39%) and large companies (29%) are more optimistic than small fabricators (16%).
Profitability
A net 32% of fabricators expect higher profits over the next 12 months compared with the previous 12 months. Firms in the Midlands (54%) and large companies (75%) are particularly confident. By business type, commercial fabricators (40%) are more positive than trade or retail firms (24%).
Problems
The main problems facing fabricators in the last three months were supplier price rises (59%), margin squeeze (50%) and low sales volume (49%).The single biggest problem was supplier price rises mentioned by 18% of fabricators. Only 7% of fabricators reported no problems compared with 19% in the previous quarter's survey.
Comment
“There is no doubt that the direct sell market, particularly in Southern England, is having one of its toughest times of the last fifteen years,” comments Winston Duguid, Managing Director of WHS Halo, who sponsor this report. “Anybody reliant on this market segment, who hasn't yet, needs to batten down the hatches and concentrate on the basics of customer satisfaction, quality and service. But the smarter operators should not despair. Although the window market is affected by maturity the other big-ticket home improvement items in the High Street are all suffering. In a really good year 4% of British households used to replace their windows; we are going to have to accept that now and in the future only 2% of British households will replace their windows - but this still means a market with an installed value of over £1.5 billion per annum, worth 5.5 million windows per annum with conservatories on top.“The whole supply chain will need to adapt to this change and it is inevitable that certain players from extruder through to fabricator and installer will be casualties. With oil continuing to stay high, and possibly advance beyond $55 per barrel, the selling prices of some extruders are simply unsustainable. We should expect a further reduction in the number of extrusion companies in 2005 and some exits could be abrupt. But there are and will be ways in which businesses can grow profitability. Good direct sell installers have already broadened their product portfolio into roofline and conservatories. The emphasis on U values and building regulations opens up other areas of home improvements where window installers are best placed to exploit. Consumer expenditure will continue to be tight in the immediate future but there remain enormous opportunities for those that recognise their company's strengths and are prepared to make them into greater strengths.”
|
The WHS Halo Report, a quarterly trends survey, is produced by Michael Rigby Associates and sponsored by WHS Halo in conjunction with Fabrication and Glazing Industries. The aim is to keep a finger on the market pulse, and to monitor fabricators' views and expectations of market movements. The survey covers a representative sample of 100 window fabricators. Telephone interviews took place between the 4th and 12th April 2005 across a balanced spread of size of firm, geographical area and type of fabricator. Numbers employed was used as an indication of company size. The categories are small (1-19 employees), medium (20-49) and large (over 50 employees).
© Copyright Michael Rigby Associates 2005 |
