Published On: Tue, Nov 21st, 2023

Conference season helps improve our understanding

The UK has entered conference season, headlined by the major political parties hitting the stages as they roll out their plans and ideas for the future. Conferences offer unique opportunities to share ideas and gather invaluable information. Fortunately, we have a couple of our own conferences in the fenestration sector, and like buses, two have come along almost simultaneously. The Glazing and Glazing Federation’s Members Conference and the Glazing Summit are two of the highlights of the glazing industry calendar. Information gathering is the primary focus for many delegates, and with the market at a bit of a crossroads, it is important that we try to gather as much market intelligence as possible.

When the economic experts are brought out to paint a picture of the backdrop against which we are all operating, it is always very difficult to pin them down to an exact prediction. This was perfectly illustrated at the GGF event, where delegates were told of three schools of economic thought that have dramatically different implications for the glass and glazing sector. These range from an average 2.5% per annum growth in the total glass and glazing output volumes over the 2024-25 period to zero average growth and even a decline of over 10% per annum in the alternative scenarios. However, there was an element of certainty when it came to long-term productivity trends; these are apparently ‘eye-popping’ with serious consequences in terms of pay and skill shortages in the fenestration sector. As a sector, we have become accustomed to relatively sharp peaks and troughs. The recent demise of Duraflex and the UK Window Group will see an influx of extra trade back into the market, as a number of fabricators and installers will need new suppliers. Also, with the loss of over 500 jobs, there is hope that some of these workers will find employment and potentially ease staff shortages for some employers. This situation will represent a short-term uplift for some suppliers in the market; however, we need to look at more long-term patterns and opportunities.

The political parties have been using their own conferences to promote plans to increase the number of houses built in the UK. Raising the current annual number from 233,000 to 300,000 could result in an additional 670,000 windows and 134,000 doors being required for the new build market. This would create a sizable total market requirement of around 5.5 million window frames annually. The trouble with trying to gauge where the market is heading is made even more uncertain when the current government is constantly moving the goalposts. With Rishi Sunak scrapping and pushing back a string of net-zero requirements, it left many in the industry scratching their heads. It was only back in July that many in the glass sector were becoming increasingly concerned that glass skyscrapers in London would become a thing of the past, as floor-to-ceiling windows would make it difficult for developers to meet net-zero targets. I think they have a few more years now before they start to panic…

While there is an element of sense to Rishi Sunak saying he doesn’t want the general public burdened with the cost of net zero, it doesn’t really help those of us working in the home improvement sector. He even went as far as removing targets for mortgage lenders to ensure properties on their loan books have an Energy Performance Certificate rating of C or better by 2030. However, a number of leading mortgage lenders pushed back on this and have, in fact, reaffirmed their own commitments to make 50% of their mortgage holders’ homes have an EPC rating of C or above by 2030. What this means is homeowners will have to invest in upgrading their homes with products such as double and triple glazing. Of particular interest is the fact that lenders like NatWest are incentivizing customers to upgrade their homes with discounted fixed mortgage rates for homes with EPC ratings of A or B. This is all in line with many financial institutions’ corporate responsibility strategies that are focusing on reducing climate change.

There is still enough noise in the market to be optimistic. We can’t hide away from the fact that triple glazing will see its influence continue to grow. There is no avoiding the fact that regulations are driving the market; the UK has been lagging behind Europe, and the Future Homes initiative is just the start of a more regulated market. We just need to adapt accordingly and treat it as an opportunity.

John Cowie – Editor