Public Sector Quarterly Trends Report
The Quarterly Trend survey keeps a finger on the pulse of the Public Sector market by monitoring activity views and expectations. The report, published every three months, will cover sales activity, prospects for the market, pricing trends and housing stock movements.
Current replacement windows or doors programme
Ninety-two percent of the Local Authorities we spoke to have window replacement programmes. The windows taken out were replaced with windows made from PVC-U (93.5%), softwood (6%) and hardwood (0.5%). See chart 1.
The windows that were taken out in the last 12 months were 36% PVC-U, 34% softwood, 12% hardwood, 12% steel and 6% aluminium.
Housing Stock
Stock transfers to Housing Associations continues and ninety-six percent of Local Authorities in this survey expect their housing stock to decrease in the next 12 months. Only four percent expect it to stay the same.
“We have been partnering since 1st October 2003 and have further developed the close working relationship that already existed with our prime Contractor providing the responsive repair service. This has enabled us to have an in depth understanding of their operational costs and margins which should, in turn, lead to an enhanced ability to manage budgets and minimise financial problems.Mr Graham Murden, Principal Property Surveyor“Since the introduction of the Partnering agreement we have witnessed a 'cultural' change within the contractor's organisation in that they have moved from a cost driven service to one based on quality and 'best value'. These improvements and developments are regularly monitored by means of joint KPI (Key Performance Indicators) and monthly contract review meetings.“
Forest Heath District Council, Bury St. Edmunds
Frames put out to tender
Twenty-three percent of Local Authorities say their window and door frames put out to tender have become larger in the last 12 months. Fifteen percent say they became smaller and 62% stayed the same.
| Window and door contracts LAST 12 MONTHS | ||||
| Supply only | Supply and fit | |||
| 1st Survey Last 12 months | 2nd Survey Last 12 months | 1st Survey Last 12 months | 2nd Survey Last 12 months | |
| DLOs | 23% | 13% | 20% | 16% |
| Direct to fabricator/ installer | 26% | 22% | 26% | 19% |
| Via main contractors | 51% | 61% | 64% | 65% |
| Other | 0% | 4% | 0% | 0% |
| Total | 100% | 100% | 100% | 100% |
| Window and door contracts NEXT 12 MONTHS | ||||
| Supply only | Supply and fit | |||
| 1st Survey Next 12 months | 2nd Survey Next 12 months | 1st Survey Next 12 months | 2nd Survey Next 12 months | |
| DLOs | 23% | 14% | 20% | 12% |
| Direct to fabricator/ installer | 32% | 21% | 26% | 18% |
| Via main contractors | 45% | 56% | 54% | 60% |
| Other | 0% | 9% | 0% | 4% |
| Total | 100% | 100% | 100% | 100% |
What Local Authorities want from sub-contractors
Health & Safety certification, Fensa registration, BBA certification and high customer service levels are things Local Authorities look for in window or door sub-contractors. These priorities are not the same for sub-contractors and finding people who are adequately trained in Health & Safety is hard.
Partnering
Local Authorities are generally positive about partnering. On a scale of 1-7 where one is very poor and seven is excellent, eighty-five percent rated it as five or above.Local Authorities who have window replacement partnering programmes say that the overall customer service is improved, there is a better end product and costs are lower.
However Local Authorities do complain that they can end up paying for contractors' inefficiency.
“The benefits of partnering include sharing problems and costs and the ability to set up an integrated team approach to maintenance wherever possible.Mr Robin Brooks, Surveyor Manager“We are on target for meeting the targets set by the Government for the Decent Homes Standard and choose our subcontractor partners along with their suppliers in order to ensure best value.“
Bournville Propertycare Service, Telford
Most important issue
Health & Safety is seen as the most important issue for Local Authorities in the next 12 months. The Decent Homes Standard comes second while funding and skills shortages are most likely to cause difficulties in the next 12 months.
WINDOW FABRICATORS
Sales to Local Authorities
Window fabricators' sales to Local Authorities increased in the three months 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.
| *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 5). Medium sized and very large fabricators and those in North were ahead of others. Twenty-nine percent of fabricators recorded increases of more than 20%.
Outlook
A net 36% of fabricators expect greater 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.Compared with the same period last year sales expectations are high across the board. A net 52% of fabricators expect to sell more in the next three months compared with a year earlier. Small fabricators and the North are particularly buoyant.
Prices
Overall a net 3% of fabricators improved their 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 and labour costs.
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." ”.
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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 housing specifiers' and fabricators' expectations of market movements. The survey covers a representative sample of 40 housing specifers' and 60 window and door fabricators. Telephone interviews took place between the 13-24 February 2004 across a balanced spread of size of organisation and geographical area. © Michael Rigby Associates 2004 Full report available free: call Kirsten Storgaard on (01453) 521621 or from www.521621.com |