Cost increases reported by 90% of construction product manufacturers

Rebecca Larkin

UK construction product manufacturers are expecting slower growth in sales and activity as cost rises and slowing construction output continue to weaken market conditions, according to the CPA’s State of Trade Survey for 2017 Q3.

Results of the survey showed that 10% of heavy side manufacturers reported an increase in sales in Q3, compared to 40% reporting a rise in Q2. On the light side, 36% of product manufacturers reported higher sales, decreasing from a balance of 55% in the previous quarter.

The weaker performance in Q3, along with rising costs for raw materials, fuel and energy, echoes the slower construction activity already seen across industry data and recent surveys. It has also lowered manufacturers’ expectations for product sales in Q4. On balance, no firms on the light side anticipate an increase in sales during the October to December period, whilst 21% of heavy side firms expect sales to decline.

The construction products manufacturing industry has an annual turnover of £55 billion, directly providing jobs for 300,000 people across 22,000 companies. Products range from ‘heavy side’ materials such as steel, bricks, timber and concrete to ‘light side’ products such as insulation, boilers, glass and lighting. For the year ahead, 28% of heavy side firms anticipate an increase in product sales, whilst on the light side, 33% of firms expect sales to increase.

Rebecca Larkin, CPA senior economist said: “For construction product manufacturers, the near-term outlook is being clouded by the perfect storm of a broad-based rise in input costs, slower economic growth and signs of an emerging weakness in construction activity outside of private housing.

“Overall costs increased for 90% of all manufacturers in Q3. Although the survey showed inflationary pressures are anticipated to ease slightly over the coming year, the industry has turned noticeably more pessimistic about the strength of activity in coming quarters. New orders in construction fell to the lowest level in three years in Q2 and the survey suggests this will start to filter through to reduced activity on site by the end of the year.”

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First-class fabricator Dekko Window Systems has a proven track record of helping its customers successfully shift into the high-end, premium market. One of the latest examples, which displays the firm’s overriding commitment to being far more than a trade supplier is their partnership with Blackburn-based McDermott Windows.

Seeing the value of Dekko’s product range and looking to diversify, the family-run business with over 15 years of experience in the industry now offers its customers Dekko’s entire range including their Infinity range of seamless uPVC windows, Räum aluminium and R9 from The Residence Collection.

“For installation firms, it’s so important to have the right product range, especially as consumer tastes are changing and more are looking towards the premium end of the market,” comments Dekko Sales Director, Kurt Greatrex. “McDermott Windows saw the tide changing and wanted to stand out from their competitors in what is a challenging and competitive market by offering high-end home improvements.”

Along with supplying their products, Dekko has also helped the firm transform their marketing through their ‘Make It Yours’ initiative. Launched at The FIT Show, Make It Yours is an all-encompassing marketing package which provides installers like McDermott with high-quality, personalised point of sale material, showroom support and promotional assets.

“We’ve said it before but premium brands need premium marketing,” continues Kurt. “Our marketing support dovetails with our luxury product line and provides a drastic improvement compared to the overprinted brochures other fabricators peddle. Our customers can meet with our design team to create tailored material which matches their brand and instantly validates their credentials with the customer, leaving an indelible impression.”

“When we decided we wanted to shift our focus towards a premium portfolio, it was really a no-brainer for us to partner with Dekko,” Managing Director Stephen McDermott explains. “It’s not a case of Dekko dropping off their products, but working directly with us and giving us the tools we need to target the premium end of the market. The marketing package alone separates Dekko from other fabricators, with such bespoke material being invaluable for a consumer-facing business like ours.”

Dekko Windows Systems was founded in 2008 by Gary Torr and Kurt Greatrex, and is one of the leading fabricators of high-end PVCu and aluminium windows and doors. Based in Greater Manchester, Dekko was listed in the 2016 edition of the London Stock Exchange’s 1000 Companies to Inspire Britain. The report celebrates the fastest growing small and medium-sized businesses in the UK.

For more information contact Dekko on 0161 406 0055 or visit www.dekkowindows.com

The finalists for the industry G-Awards have been revealed. The winners will be announced at the gala dinner on the 17th of November at the The London Hilton on Park Lane. Finalists for the awards include:

Fabricator of the Year:

Astraseal, Building Products Solutions, Glazerite UK Group, Roof Maker, Roseview, Solidor.

Installer of the Year:

Sedgefield Windows, SEH BAC, Sheffield Window Centre, Sherborne, The Window Company (Contracts), Thistle Windows & Conservatories.

Conservatory Installer of the Year:

SEH BAC, Sherborne Conservatories, Thistle Windows & Conservatories.

New Product of the Year:

Heritage Flush Sash by Deceuninck, Korniche Aluminium Roof Lantern by Made for Trade, Profile 22’s Optima Flush Casement Window, R7 by Residence Collection, REAL Aluminium – Aluminium Made Easy, Stratus by Synseal, Yale Conexis L1 Smart Door Lock.

Promotional Campaign of the Year – Trade:

Epwin Window Systems , Euroglaze, Mila, REAL Aluminium, Reynaers.

Promotional Campaign of the Year – Retail:

SEH BAC, Solidor, Thistle Windows & Conservatories.

Component Supplier of the Year:

Double R Glass & Roofing Systems, Edgetech, Icotherm, Jackloc, Mila, Window Widgets.

Customer Care Initiative of the Year:

Astraseal, Doorco, Everglade Windows, Glassolutions, Mila, SEH BAC, VPS Property Solutions.

Training & Development Initiative of the Year:

Epwin Windows Group, Euroglaze, Synseal Group, Veka.

Glass Company of the Year:

Double R Glass & Roofing Systems, Fire Glass UK, Global Glass, Go Glass, Ravensby Glass.

G17 Unsung Hero Award Finalists:

Chris Lloyd – Saint-Gobain Glass, Clive Sparkes – Go Glass, Danny Barnett – Solidor, Gabriela Hammond – Veka, Melanie Jacobs, Glazerite.

For further information please visit the G17 website at: www.g-awards.com/g-17-finalists/

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Insight Data has recently compared the financial performance of fabricators and installers as part of a new Industry Report, following research conducted with over 15,000 window, door and conservatory companies.

The report reveals a significant divide between supply-only fabricators, fabricators that install, and installers who don’t manufacture.

Insight Data analysed the financial results of limited companies and LLPs. As small and medium companies don’t need to publish turnover or full accounts, Insight measured ‘net worth’ taken from their latest published accounts and calculated industry average benchmarks.

Fabricators who ‘supply only’ performed the best over the last 3 years with an average net worth up some 80% from £280,220 to £505,047. Fabricators who install improved from £219,093 to £265,228 – a rise of 21%, while installers who buy-in strengthened their financial position by 9%, from £49,651 to £54,280, although many companies in this category are lifestyle businesses.

It must be noted that companies post their published accounts in arrears and the vast majority of accounts relate to a 2016 financial year end.

Andrew Scott, Managing Director of Insight Data, gave a word of warning:

“The industry has enjoyed several years of steady growth and financial success, but an uncertain market over the last 12 months has created mixed results, with some companies reporting a slow down while others, especially premium or niche product manufacturers, have maintained growth. 2017 financial results may paint a different picture.”

The full Insight Report provides in-depth analysis of the industry, including business activity, market sectors and product information. It is available for free for a limited period, visit www.insightdata.co.uk/reports

Neil Ginger and Victoria Brocklesby, founders of Origin, the UK’s leading manufacturer of aluminium bi-folding doors, residential doors and windows, have been jointly shortlisted in the Family Business Entrepreneur of the Year category at the NatWest Great Entrepreneur Awards 2017.

The prestigious national awards, now in their fifth year, champion British entrepreneurs and their stories, from creating jobs to inspiring innovation. Founders and business leaders of the companies shortlisted act as agents for positive change within the UK, revolutionising the way people live and work.

Origin is the only company in the fenestration industry to be named as a finalist in this year’s awards. With this in mind, Neil Ginger, CEO at Origin, commented: “We set up Origin in 2002 when we spotted an opportunity in the UK market for high quality aluminium bi-folding doors. Since then, we have not looked back. Our goal has always been to manufacture top quality products, offer unrivalled lead times and a gold-standard of service to our partners. Being shortlisted for this award is recognition for all of the hard work that goes on at Origin, not just by us, but by the whole Origin family.”

Statistics show that two thirds of UK businesses are family owned, and generate more than a quarter of the UK’s gross domestic product market. That means that with 4.7 million businesses in the UK being run by families, the competition for Family Business Entrepreneur of the Year has never been greater.

Victoria Brocklesby, COO at Origin, said: “When we first set out on our Origin adventure, we were one family, working together, to achieve excellence. This is still true today. We work hard to ensure it stays at our very core, no matter how much we grow. As people, and as an organisation, we are passionate about what we do, embracing change and opportunity with enthusiasm. It is fantastic to be one of this year’s finalists, as the award recognises all of the hard work that got us to this point.”

The judges, who include Wilfred Emmanuel-Jones, The Black Farmer; Toni Mascolo, CEO at Toni&Guy; and Helena Hills, CEO TrueStart Coffee, were no doubt impressed by Neil and Victoria’s inventive approach to manufacturing. By helping its partners increase customer service levels and product knowledge, the company fuels its own business growth. This, coupled with the immense importance they both place on having a ‘family feel’ right across the organisation, helped their entry stand out above the rest.

The judges were also particularly impressed with the ‘Your Lead Time, Not Ours’ delivery promise. Pioneered by Neil, this has allowed Origin to revolutionise the way the manufacturing industry looks at lead times. Origin partners can specify when they want their bespoke products delivered, with the Origin Bi-fold Door available in just 24 hours. The methods implemented by Neil and Victoria are driving Origin forward, leading the way in terms of innovation and product development.

Origin representatives will now join other finalists and sponsors at the Great Entrepreneur Awards, held at the Lancaster London on November 21^st, 2017. Competing against Origin for Family Business Entrepreneur of the Year Award are ribot, New Skills Academy, Sassy Bloom and Dandi Patch.

Neil concludes: “Our vision for Origin was simple, manufacture top quality products with uncompromising levels of service. This is something we have done from day one, and we have grown exponentially based on it. As we grow, and innovate, we stay true to our roots and the family values that have taken us so far already. We are thrilled to be finalists, and we hope that we go one step further on Awards night and bring the title home with us.”

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As demand for aluminium gains momentum, Tony Craggs, Managing Director of Virtuoso reveals how the unique Virtu-AL aluminium alternative composite door will help installers keep pace

Our industry is rapidly evolving and one thing that every installer wants is more leads, more sales and healthier profits. The launch of Virtu-AL – the UK’s first aluminium textured, non-woodgrain finish composite door – aims to help installers to keep ahead of the curve and make the most of the enormous popularity of contemporary aluminium products. Aluminium has certainly invigorated the industry and recent figures released by Palmer Market Research suggest that aluminium is well on course to reach a 17-year high by 2020, peaking at 220,000 frames. It’s therefore no surprise that the Virtu-AL door has been greeted with such enthusiasm by installers because it gives them a genuine alternative to anything else out there.

In this industry, it’s all about selling the difference and Virtu-AL is as unique as it gets! We saw a gap in the market for a product that would satisfy the growing consumer demand for modern, aluminium style products and knew we had a terrific opportunity to bring something new to the industry. The aim behind the development of Virtu-AL was very simple; to create a GRP skinned composite door that looks and feels just like aluminium to deliver that all important modern, architectural look for the end user. A complete re-invention of the ‘standard’ composite door, Virtu-AL is the ultimate contemporary entrance door for those homeowners who want aspirational quality of a powder-coated aluminium door.

Encapsulating the best qualities of an aluminium and a composite door, Virtu-AL achieves the premium finish of aluminium but with the performance, security and value for money that homeowners expect of a composite door.

Standing out from the crowd – Virtu-AL incorporates a 4mm GRP skin, which is thicker than many other GRP skins and looks and feels just like aluminium. Underneath this skin is a durable 44mm composite slab which delivers exceptional thermal and acoustic performance. The Virtu-AL door brings a fresh opportunity for installers who are used to selling traditional door panels and composite doors and it gives them something that’s very different from everything else to sell. In a market saturated with ‘me-too’ products, installers can now set themselves apart with this very desirable, higher-end product. The first thing that strikes you about Virtu-AL is just how good it looks and feels. We’ve been actively encouraging people to touch the door because it feels nothing like a traditional composite door. And it looks so like an aluminium door that many installers just can’t believe the door slab is GRP. This is a product that can seriously compete with the look and feel of aluminium. Virtu-AL oozes with all the characteristics of aluminium and is set to capture the hearts of sophisticated homeowners. Created to match and complement other aluminium products, this ‘ultimate aluminium companion’ will help installers to capitalise on the growing aluminium sector and help those homeowners to achieve a unified aluminium look for their home.

Exclusive designs – The Virtu-AL door is available in four contemporary designs, which are totally exclusive to Virtuoso. For a truly premium look, there is an option for anodised glazing cassettes too. There is a choice of seven standard and 14 superior colours. Doors can also be sprayed to match any RAL colour in our state-of-the-art in-house spray booth. We offer a range of traditional or contemporary hardware from ERA Fab&Fix. The ultra-modern new inline flat pull bar, which we were the first to adopt, is my personal favourite. Every standard locking system we use has achieved the 3-star security standard and we now also offer the new Lock Lock security handle from Brisant Secure. We’re really excited to be a launch partner for this fantastic product. The handle is used in conjunction with the 3* Ultion cylinder and has a patented design to withstand cylinder picking, bumping, drilling and snapping. It incorporates a unique spindle block which is activated to prevent the door from being opened from the outside, even if the cylinder is breached. The Virtu-AL door can be easily ordered through Virtuoso’s door designer software – Gateway. Full marketing and showroom support is also available.

Tel: 0191 410 9333

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Epwin Window Systems’ Excellence as Standard membership programme aims to set a new benchmark for quality at every stage of the industry. The quality of the marketing support that’s available via the programme demonstrates how seriously the company takes this commitment. Katie Leese, Excellence as Standard’s Programme Manager, said: “The marketing elements of Excellence as Standard reflect the results of our customer research and represent an industry-leading marketing support package.”

Excellence as Standard offers a comprehensive suite of branded marketing material including brochures, POS items, sample bags, clothing, drop cards and advertising templates. What’s more, many items can be easily personalised with an installer’s logo, colours, contact details, images and text via the online portal to create a completely co-branded and professional image.

Lead generation comes in several forms: Excellence as Standard-approved fabricators, homeowner ratings and reviews, Epwin brand websites, bespoke lead generation options and the Excellence as Standard website, www.excellenceas.co.uk. Every member has their own landing page on the EAS website which they can personalise and add their homeowner ratings and reviews.

Installers looking to harness the power of the web even more will find support in the form of the Excellence as Standard dashboard. This gives installers complete visibility of all their leads, ratings, reviews and pay-per-click results so they can develop and leverage their online presence.

And when member businesses need further support they’ll find it in the form of a dedicated brand manager who is focused on a member’s success and will be on hand to offer marketing advice and support.

The marketing support is just one element of the Excellence as Standard programme because members also benefit from the market-leading products available from Epwin Window Systems’ core systems brands – Profile 22, Spectus and Swish, the Excellence Academy, partner benefits and the support team.

In short, Excellence as Standard has everything that’s needed to become the name that consumers look for when they are researching new home improvement products. It’s why so many fabricators and installers are flocking to be part of the programme. For more information visit www.excellenceas.co.uk

H.B. Fuller has finalised its acquisition of adhesive and sealant supplier Kömmerling’s parent company, Royal Adhesives & Sealants, including its operations in Pirmasens, Germany.

The merger of these businesses is said to have created a ‘more capable and dynamic company for customers, employees and shareholders’.

H.B. Fuller and Royal are said to be ‘better together’ with ‘complementary market penetration and minimal overlap in customers and technology’, and the strategic capabilities of the Pirmasens site will support the company’s long-term growth strategy.

It is hoped that Kömmerling’s market strength in insulating glass and other adhesive technologies for manufacturers of durable goods ‘will broaden H.B. Fuller’s portfolio and supplement the company’s progress towards its growth and profitability goals’.

www.hbfuller.com/royal

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