Time to fight back against Government forces

There is little doubt that the recent Budget, delivered by Chancellor Rachel Reeves, will make life tougher for employers in 2025. With increases in employer National Insurance contributions and the reduction of the threshold where employers begin paying NI contributions on each employee’s salary, the costs are set to rise. Calculations by investment platform AJ Bell indicate it will cost businesses an additional £2,367.29 annually to employ someone on minimum wage from April.

While some argue that the impact will not be universal, as nearly 4.1 million of the UK’s 5.5 million businesses are not employers (sole traders and freelancers), the strain on those that do create jobs, particularly small firms, will be significant. These are often businesses that operate on slim profit margins or are already navigating losses.

Faced with this mounting financial burden, many companies will be forced to make adjustments to offset these escalating employment costs. Without an immediate boost in productivity or profits—difficult to achieve in the short term—firms may resort to measures like hiring freezes, wage cuts, or reduced investment in growth to maintain stability.

What does this mean for specific sectors? For manufacturers, the path forward will require a sharp focus on productivity. With the rising costs of both new hires and existing labour, these businesses will likely turn to efficiency improvements or, ultimately, raise prices. Investment in machinery and artificial intelligence offers a potential lifeline, allowing firms to enhance production while keeping workforce costs manageable. AI, already transforming processes in manufacturing, customer service, and warehousing, could be a saving grace. In fenestration, many firms are adopting AI for technical support, marketing, and production.

The Government’s pro-worker stance poses a balancing act for employers, as discussions of a four-day work week further complicate the outlook. Employing human workers has become an increasingly costly challenge; perhaps a future supplemented by AI, robotics, and automation is the answer.

In retail, particularly within home improvements, installers and retailers will need to sharpen their strategies to appeal to homeowners. With employers squeezed by the Budget, there could be downward pressure on wages and recruitment in the private sector. This makes it essential for businesses to create compelling value for potential buyers, particularly in windows, doors, and glazed extensions, by offering the right product solutions. Identifying the right solutions is key. Tommy Trinder’s latest data shows that flush casements now comprise 18% of all PVC-U windows installed in the UK, with 54% of installers offering them. However, 46% of installers are missing out on part of this growing market. Similar trends have previously driven demand for composite doors and bi-folds, and now, aluminium’s popularity is also accelerating. Fabricators have demonstrated remarkable adaptability to changing tastes, and many now provide options catering to a variety of consumer preferences.

In 2025, homeowners will seek greater value for their money, though this doesn’t necessarily imply lower prices. Adding features like smart locking systems and sensors could help businesses capture market share. In France, such smart features are often standard, allowing retailers to charge a premium for quality products.

Fenestration businesses will need to work tirelessly to overcome the economic challenges brought about by the Budget and a change in government. There is hope that government policies intended to stimulate the economy and improve the UK’s housing stock will begin to take effect in the near future. In the meantime, the fenestration sector can navigate these challenges by offering solutions that bring light into homes, enhance security, create space, and improve the aesthetics and functionality of properties.

The final piece of the jigsaw is marketing. Without it, even the best products can remain overlooked. Whether in business-to-business or business-to-consumer markets, 2025 is the year to step up and make noise about the outstanding fenestration products on offer. Now is the time to shout from the rooftops and ensure that potential customers know exactly what’s available.

John Cowie – Editor

E: john.cowie@windowsactive.co.uk