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The BWF Timber Window Accreditation Scheme
Bi-Annual Trends Report
Overview
“The housing market has not crashed, “says Mike Rigby whose company produces this report, “but the landing gear is out and a soft landing expected. House prices are cooling nationwide. Interest rate rises are doing the work they were intended to do. House builders Wimpey, among others, suggest they will cut planned building so that supply will meet demand to maintain prices. “But while the housing market slows, consumer spending appears more robust than ever. Despite negative headlines about “Armageddon August” the actual figures showed that, although some retailers are suffering, high street spending was up in August. Some home improvement companies and some sectors also did better than others. Although the wet weather affected sales of certain products, consumers were happy to carry on spending if the brand was strong and price was right. Tesco and B&Q are having a field day. “Interest rates are not high enough to stop spending but the global economy is under pressure from rising oil and commodity prices. A more cautious approach to spending is likely. Attracting the right customers is crucial to maintaining momentum in the market.”Sales, bi-annual
During the six months, March to August 2004, 40% of timber window manufacturers reported sales up compared with the previous six months. Only 11% recorded a decrease and 49% stayed the same.
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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 little has changed.
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On this basis, a net 29% of manufacturers achieved higher sales in the last six months compared with the previous six months (chart 1). More large manufacturers (net 42%) reported increases, compared with medium (25%) and small (27%). Manufacturers in the Midlands fared better (50%) than those in the North (38%) and South (8%). A significant 55% of those who reported increased sales saw sales growth of more than 10%.
March 2004 - August 2004 sales compared with the previous six months by size
| Size | Increase | Decrease | Same | Total | Base |
| Small | 36% | 8% | 56% | 100% | 62 |
| Medium | 38% | 12% | 50% | 100% | 24 |
| Large | 64% | 22% | 14% | 100% | 14 |
| Total | 40% | 11% | 49% | 100% | 100 |
March 2004 - August 2004 sales compared with the previous six months by region
| Region | Increase | Decrease | Same | Total | Base |
| South | 30% | 23% | 47% | 100% | 40 |
| Midlands | 54% | 3% | 43% | 100% | 28 |
| North | 41% | 3% | 56% | 100% | 32 |
| Total | 40% | 11% | 49% | 100% | 100 |
Sales, year-on-year
Year-on-year sales are also ahead. Thirty percent of manufacturers improved sales in the last six months compared with the same period last year. Large manufacturers were ahead (46%) followed by small (31%) and medium manufacturers (21%).Regionally, a net 46% of manufacturers in the Midlands increased sales, followed by the North (34%) and South (15%). Manufacturers producing 20+ frames per week reported most widespread growth with none of those interviewed in this group recording a drop. Fifty-eight percent of firms who saw sales rise, reported an increase of 10% or more.
Sales forecasts
Just under a net one in four manufacturers expect sales of timber windows to increase in the next six months compared with the previous six months (Chart 2). Large manufacturers were ahead with a net 62% expecting higher sales. Medium (21%) and small firms (18%) are less optimistic. An equal number of manufacturers in the Midlands, North and South forecast growth (24%).Sales forecasts are also ahead for the next six months compared with the same time last year. A net 23% of manufacturers anticipate higher sales. Large (46%) and medium (33%) firms are more positive than small firms (16%). Of those who forecast improved sales over the period, a significant 62% of manufacturers forecast a rise of 10% or more.
Profits
Profit expectations remain buoyant with a net 37% of manufacturers expecting better profits in the next 6 months compared with the previous six months. Large firms (69%) are particularly positive. Manufacturers in the South are more bullish in their forecasts for better profits (45%) compared with the Midlands (32%) and North (31%). Of those who forecast a rise in profits, 48% expect profits to go up by 10% or more.
Order Volumes
A net 35% of manufacturers reported an increase in orders compared with six months ago. Medium sized and small manufacturers' orders (36%) marginally exceeded those of large manufacturers (31%). All regions saw fuller order books.
Employment
A net 11% of manufacturers reported a rise in employment compared with the last six months. More manufacturers in the North (25%) took on staff than the Midlands (7%) or South (3%).
“We have seen substantial increases in our sales of timber windows, with the majority going into sophisticated, bespoke garden rooms.“Unlike some alternative materials, timber is unlimited in terms of its design capabilities, a benefit that is driving its growth as a material of choice for windows and conservatories. Although this is still a niche market, consumers are increasingly looking for something different.”
Mr B Rump, Proprietor
Atrium Conservatories, Kington
Prices
A net 40% of manufacturers put up prices compared with six months ago. More small manufacturers increased prices (47%) than large (31%) or medium sized (29%) manufacturers. Of those who reported a rise, 65% put up prices by up to 6%.
Buying Prices
A net 53% of manufacturers felt the pinch of the increase in the cost of materials compared with six months ago. Higher cost of materials was felt across the board by a balance of more than one in two small, medium and large manufacturers. The North bore the brunt with 63% paying more for materials than six months ago.
Prospects
Confidence remains high with a net 42% of manufacturers more positive now about the overall prospects for the Timber Window market than six months ago. This optimism is echoed across the board by manufacturers of all sizes in all regions.
Investment intentions
A balance of one in three manufacturers expect to increase their investment spending over the next 12 months compared with the previous 12 months. Large companies (46%) and manufacturers in the North (44%) are more likely to invest.
Window types and styles
Looking at styles, 3% are tilt-turn, 6% reversible-pivot, 30% vertical sliding sash, 60% are casement and other styles are 1%.
Eighty-five percent of hardwood and 83% of softwood comes from a sustainable source.
This survey shows a notable increase in the proportion of windows that are factory primed compared with the previous two surveys (see table below).
| % of Timber Windows that are… | 1st survey | 2nd survey | 3rd survey |
| Factory Primed | 38% | 35% | 53% |
| Fully Factory Finished & Factory Glazed | 21% | 17% | 15% |
| Factory Primed & Factory Glazed | 15% | 19% | 12% |
| Unprimed | 7% | 11% | 10% |
| Fully Factory Finished but not Glazed | 1% | 10% | 5% |
| Factory Semi-finished & Factory Glazed | 7% | 4% | 3% |
| Factory Semi-finished | 11% | 2% | 2% |
Problems
Lack of skilled staff (32%), changes in legislation (16%) and too much volume (9%) were the single biggest problems for manufacturers in the last six months. Fourteen percent of manufacturers report no problems.
Comment
BWF Director Richard Lambert comments, “The timber window industry is enjoying its best market conditions for many years. The latest survey confirms the anecdotal reports from BWF members that they are busier than they can remember and orders, sales and profits are good. This is generating a sense of optimism for the future which is more than just a feelgood factor. The continuing bullish trend for investment in new plant and machinery indicate that companies are basing hard financial decisions on the belief that there has been a genuine shift in the market towards timber windows.This shift is not simply the result of the current vogue for wood and wood products. If timber windows have won people back, it has been by improving the products and providing the best value for the money spent, rather than trying to compete on price. This will help in the long run if materials costs rise, as timber windows will stand a better chance of maintaining the improved market if they are seen as added value products rather than commodities.
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The Timber Windows Report, a bi-annual survey, is sponsored by The British Woodworking Federation's TWA Scheme in conjunction with The Timber Trades Journal and produced by Michael Rigby Associates. The aim is to keep a finger on the timber windows' market pulse, and to view manufacturers' expectations of market movements. Michael Rigby Associates specialises in fact based marketing in home improvements, DIY and building materials markets. The survey covers a representative sample of 100 timber manufacturers. Telephone interviews took place between the 9-17th September 2004 across a balanced spread of size of firm and geographical area. 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 BWF and Michael Rigby Associates 2004 Full report available free: call Lucia Di Stazio on (01453) 521621 |
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