Healthy window sales to the public sector
Sales to Local Authorities
Window fabricators' sales to Local Authorities improved in November 2003-January 2004 compared with the previous three months in the build up to what is traditionally the busiest time of the year for public sector work. A net* 24% of fabricators reported increases (chart 1).
|
*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. |
Sales improved across the board with a net 30% of fabricators doing better in the last three months compared with the same time last year (chart 3).
Medium sized and very large fabricators as well as the North were ahead of others.
Twenty-nine percent of fabricators recorded increases of more than 20%.
Sales to Housing Associations
A net 11% of fabricators increased sales in the three months to January (chart 2). Large fabricators improved sales but small and medium sized firms saw no difference.
Compared with the same time last year, a net 39% of fabricators increased in the last three months (chart 3). Sales were strong across the board, but small fabricators, and those in the North and South did particularly well. Fifty-eight percent of fabricators increased sales by 10-15%.
Outlook: Local Authorities
A net 36% of fabricators expect increased window and door sales to Local Authorities in February-April compared with the previous three months. More small fabricators expect to sell more. All regions expect improvement but Scotland is particularly positive.Fabricators' year on year sales expectations are high across the board (chart 4). A net 52% of fabricators expect to sell more in the next three months compared with the same time last year. Small fabricators and the North are particularly positive.
Outlook: Housing Associations
Just under a net one in five fabricators expect to sell more to Housing Associations in the next three months compared with the previous three. More medium sized fabricators and those in the Midlands expect improvements.Year on year sales expectations are high across the board (chart 4). A net 22% of fabricators expect to sell more in the next three months compared with the same time last year. Again medium sized fabricators and the Midlands are particularly positive.
“The dead line for Decent Home Standard is 2010 and we are on target. We work closely with our contract partners to achieve the Standard and monitor progress by audited performance indicators.Mr Mark Johnson, PVCu Manager“Partnering means better work planning, value for money and customer focus. Our tenants will benefit from more choice and improved security.
“We are confident to go down this route because although price is a factor, it's our policy of adhering to a high standard of product and service which allows us to establish a long term relationship with these organisations.”
Rotherham Metropolitan Borough Council, Rotherham
Prices
Overall a net 3% of fabricators achieved improved Local Authority contract prices in the last three months compared with the previous three. Only small fabricators and the Midlands put up prices.Over the next 12 months a net 39% of fabricators expect their prices to Local Authorities to go up. Increases reflect higher material costs and increased labour costs.
A net 4% of fabricators achieved higher contract prices to Housing Associations contract prices in the last three months compared with the previous three. Again only small fabricators and the Midlands improved their prices.
As with Local Authority prices a net 39% of fabricators expect to raise their Housing Association prices in the next 12 months (chart 6). The major reason for increases is more expensive raw materials.
Partnerships
Twenty-three percent of the fabricators in this survey have formal partnerships. The view on partnering is mixed. This is the case for both fabricators who have partnerships and those who don't. The balance of positive and not so enthusiastic views is approximately equal. At one extreme fabricators say 'there are no benefits - it's a complete farce', 'very time consuming', 'a smoke screen' and 'it leads to price fixing. On the other hand the positive comments include 'makes life much easier', 'financial benefits, increased quality and customer satisfaction', 'share of risk and benefits' and 'provides security'. But fabricators' overall view is that partnering can help restore sensible pricing.
Size of contract in the last 12 months
| Larger | Smaller | Stayed the same | |
| Local Authority | 46% | 3% | 51% |
| Housing Association | 21% | 4% | 75% |
Contracts are becoming bigger. A net 43% of fabricators say the number of windows and doors per Local Authority contract they have tendered for in the last 12 months has become larger. A net 18% of fabricators say it applies to Housing Associations too.
 |
 |
Confidence
A net 13% of fabricators are more confident about prospects for public sector windows than they were three months ago (chart 9).
Overall prospects for the window industry are also good with a net 5% of fabricators more confident than they were three months ago.
Most important issues in the next 12 months for fabricators
| Health & Safety | 1st |
| Skills shortages | 2nd |
| Security | 3rd |
| Decent Homes Standard | 4th |
| Environmental issues | 5th |
| Recycling | 6th |
The top three most important issues for fabricators are unchanged from the first survey. But the Decent Homes Standard now appears as the 4th most important issue.
Specifiers on the other hand, rate the Decent Homes Standard as their top issue, followed by health & safety and skills shortages.
Problems
Chart 10 shows the problems associated with a growing and buoyant market - 39% of fabricators say they have no problems or that lack of skilled staff is their single biggest problem.
REGISTED SOCIAL LANDLORDS/SPECIFIERS
Specifiers' expectations, housing stock
We asked Local Authorities and Housing Associations what their expectations are for housing stock over the next 12 months.
| Increase | Decrease | Stay the same | |
| Housing Associations | 68% | 20% | 12% |
| Local Authorities | 0% | 96%* | 4% |
*As the table clearly shows Local Authorities continue to divest stock.
Specifiers with a new build housing programme underway say that houses accounted for 62% of dwellings, flats for 34%, bungalows and sheltered housing for the remaining 4%.
Specifiers with a replacement window or doors programme say that 7% of the windows they take out are aluminium. Hardwood accounts for 9%, softwood for 34%, steel for 8% and PVC-U for 42%.
The windows that are being installed - replacement and new build - are 5% hardwood, 22% softwood and 73% PVC-U.
| Housing contracts in the last 12 months | Fabrication contracts | Installation contracts |
| Direct with a DLO | 5% | 8% |
| Direct with the fabricator/installer | 28% | 28% |
| Arranged through contractors | 64% | 62% |
| Others/td> | 3% | 2% |
Service, quality of product and value for money are just some of the qualities specifiers require from window or doors sub-contractors. Many speficiers do not have any specific problems interfacing between fabricators and contractors, but time keeping and specification problems were mentioned.
Comment
“"The Government's programme to bring three million homes up to the Decent Homes Standard by 2010, has been confronted by the skilled trades shortage," says Mike Stevenson, Sales and Marketing Director of System10 who sponsor this survey. "Growing input from private contractors and the formation of relationships between the public and private sector have had the effect that private companies now share the responsibility for addressing skills shortages with local and central government. And it's in everyone's interest to meet housing targets. Skilled staff is vitally important to help realise the plan for social housing's future. CITB figures show that there is a net shortfall of 50,000 people per year coming into construction - this is at a time when the amount of projects on the go is at its highest level for many years. The effect of insufficient numbers of installers and poorly trained installers has a major impact on the window industry's ability to meet client needs. This is where System10's partnership with Remploy, for example, comes in. The System10 and Remploy Centre of Excellence helps address the issue by providing training to local people coming into construction for the first time. “In the scramble to achieve the Decent Homes Standard and with the shortage of experienced window fabricators and installers, some public sector specifiers may have to work with companies who have no expertise in this sector. The winners will be the local authorities and housing associations who have signed up early to a window supplier with a proven track record in the public sector.“
|
The Public Sector Survey, a quarterly trends report, is produced by Michael Rigby Associates and sponsored by System10. The aim is to keep a finger on the public sector's market pulse, and to view fabricators' and specifiers' expectations of market movements. The survey covers a representative sample of 40 window and door fabricators and 60 specifiers. Telephone interviews took place between the 13-24 February 2004 across a balanced spread of size of organisation and geographical area. Numbers employed was used as an indication of company size. The categories are small (1-19 employees), medium (25-49), large (50-200) and very large (over 200 employees). © Michael Rigby Associates 2003. Tel (01453) 521621, www.521621.com |