CAB Chief Executive, Justin Ratcliffe, looks at the latest CAB Q3, 2013 State of Market results which highlight key signs of market improvement especially in demand and capital investment.
Optimism is one of the most important elements in any market recovery and CAB’s latest State of the Market Survey for Q3, 2013 highlights this with key improvements especially in the forecasts for both demand and capital investment. 58% net balance of respondents expected sales volumes to increase in Q4, 2013, while a record 75% net balance expect sales to increase over the next year. Critically, factors that affect constraints on CAB Members’ activity have also changed over the last 12 months with only 48% of respondents citing ‘demand’ (compared with over 80% in Q3, 2012), 9% citing ‘labour availability’, 17 % citing ‘capacity’ and encouragingly 17% citing ‘no constraints’.
The CAB Survey uses utilises a balance of respondents to identify most of the trends. A positive balance of respondents means that the proportion of firms reporting a rise is more than the proportion of firms that reported a decline. The latest Survey continues the trend of positive news about important sectors for CAB’s growing membership. Robert Palmer’s most recent forecasts to 2017 predict the window and entrance door markets will grow by 17% to 7 million and 1.6 million units respectively and a doubling in the bi-fold door market to 65,000 units.
While optimism levels for forward sales are consistent with the rest of the UK Construction sector (Construction Products Association figures show 79% net balance of respondents) there are other areas that highlight where CAB’s membership may outperform the UK Construction sector. With regards to capacity, a year ago only 18% net balance of respondents expected to be working at over 90% capacity to the end of September 2013, compared to 37% net balance of respondents who now forecast this to be the case over the next year (24% for UK construction overall). Only 32% net balance of CAB members believe that unit costs will rise over the next 12 months compared to 62% net balance for construction overall.
Perhaps the most marked ongoing improvement in the quarterly Survey is the forecast for the next 12 months for Capital Investment. For the first time ever, a greater net balance of members forecast an increase over the next 12 months in all six of the metrics (property, plant & equipment, customer research, R & D, product improvement and e-business) compared to the last year, which is perhaps one of the best barometers of optimism amongst our sector.
CAB members continue to see aluminium fenestration gaining popularity as a premium choice for consumers and many home improvement companies have, as a consequence, moved into aluminium production. With housing starts forecast to increase by nearly a half from 2012 to 2017 supported by various government initiatives and, according to Palmer, the home improvement market set to grow 14% during the same period there are further good reasons for optimism.
CAB for its part offers a rich mixture of high level technical support and marketing promotion together with detailed market insights which will help businesses in the sector stand out from the competition and maximise the growing market opportunities. To learn more about being a member of CAB in 2014, please contact us on 01453 828851 or email firstname.lastname@example.org