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Quarterly Trends Report
Window fabricators forecast strong end to year
Sales
Forty eight percent of window fabricators interviewed increased sales in the last three months compared with the previous three months. Thirteen percent saw sales decrease and thirty nine percent saw no change.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.
On this basis, a net 35% of firms increased sales over the period. Companies in the North (51%) reported most widespread growth followed by companies in the Midlands (27%) and the South (24%). Small firms (43%) improved over the quarter, ahead of large (28%) and medium-sized firms (25%). Fabricators with a weekly production of over 300 frames and trade fabricators had the most widespread increases.
July-September 2003 sales compared with the previous three months - by size
| SIZE | Increase | Decrease | Same | Total | Base |
| Small | 52% | 9% | 39% | 100% | 54 |
| Medium | 43% | 18% | 39% | 100% | 28 |
| Large | 44% | 17% | 39% | 100% | 18 |
| Total | 48% | 13% | 39% | 100% | 100 |
July-September 2003 sales compared with the previous three months - by area
| AREA | Increase | Decrease | Same | Total | Base |
| South | 46% | 22% | 32% | 100% | 37 |
| Midlands | 39% | 12% | 49% | 100% | 26 |
| North | 57% | 5% | 38% | 100% | 37 |
| Total | 48% | 13% | 39% | 100% | 100 |
A net balance of 45% of window fabricators increased sales in the last three months compared with the same three months of last year. More firms in the Midlands (60%) reported growth compared with those in the North (51%) and the South (27%). Small companies did best with a net 53% of respondents ahead. Large and medium-sized companies also showed improvements (45% and 25% respectively). Fabricators with a weekly production of less than 50 frames and trade fabricators reported the most widespread increases.
Stocks
A net 28% of firms increased stocks compared with three months ago, especially fabricators in the Midlands and the North (39%) and large companies (35%).
Employment
A net 19% of fabricators increased staffing levels in the period July to September compared with the previous three months (chart 2). Medium-sized companies and firms in the North were most active.
Orders
Just under a net two in five of the companies interviewed reported an increase in order volumes compared with three months ago (chart 3). Fabricators in the Midlands increased order volumes (50%) with those in the North just behind (46%). More medium-sized companies (43%) saw order volumes pick up than small (39%) and large companies (22%).
Capacity
Fifty five percent of fabricators we spoke to worked at capacity in the quarter (chart 4).
Prices
A net 15% of fabricators put up their prices compared with three months ago (chart 5). More firms in the South and Midlands (21%) increased prices compared with the North (5%). A net 19% of small and large companies hiked prices in the quarter. More firms producing between 50-125 frames per week and retail specialists achieved higher prices.
Raw materials
A net balance of 48% of fabricators paid more for their materials compared with three months ago (chart 5). Companies in the North (64%) were most affected as well as medium-sized companies and retail specialists.
Price expectations
Just over a net one in two fabricators expect better profits in the next twelve months compared with the previous twelve. Small companies (57%) and firms in the Midlands (54%) had the strongest expectations.
Investment intentions
A net 32% of window fabricators plan to invest more in the next twelve months compared with the previous twelve months (chart 6). More firms in the South (46%) plan to invest than companies in the Midlands (27%) and North (22%). More small and large companies (43% and 35% respectively) aim to invest than medium-sized companies (11%).
Outlook
The outlook for the next three months is healthy with a net 23% of window fabricators expecting sales to increase compared with the previous three months. Companies in all regions are confident especially those in the South (38%). This is similar across all size of fabricator in all regions. Trade fabricators and those producing over 300 frames per week are the most bullish.Compared with the same period last year expectations for the next three months also look good with a net 47% of window fabricators interviewed expecting to increase sales. The outlook is robust across the country. Trade fabricators are particularly positive.
Mix of Business
Twenty two percent of the windows and doors produced went into conservatories (chart 7). Looking to 2005 fabricators expect this to grow to 27%.
Prospects
A net one in four firms are optimistic compared with three months ago (chart 8) Companies in the Midlands (39%) are the most confident, with no respondents feeling less confident. Fabricators of all types and sizes are positive.
Profitability
Just over a net one in two fabricators expect profits to grow in the next twelve months compared with the previous twelve. Small companies (57%) and those in the Midlands (54%) have higher expectations than others.
Problems
Lack of skilled staff, margin squeeze and slow payment and bad debts were the main problems for fabricators this quarter. The single biggest problem was lack of skilled staff, mentioned by 33% of those interviewed.
Comment
“The direct sell window market is showing an unexpected resilience in the final quarter of 2003.” comments Winston Duguid, Managing Director of the UK Commercial Division of Bowater Windows, who sponsor this report. “A patchy summer had given weight to those who thought 2003 was the first real year in which saturation has shown its hand, but this fear has proved to be unfounded. South East England in particular has rebounded for windows and with conservatory growth still strong, many fabricators are enjoying full use of their fabrication and installation capacity. The prospects for 2004 are a little more mixed with the Bank of England already conditioning us for interest rises and certain leading economists warning us of house price deflation during the next twelve months.”“Meanwhile the public sector is enjoying quite a change in structure. The market is now becoming dominated by fewer but much larger schemes coming out to tender. The nature of the tender is also quite different with three/five year and even ten year partnerships being formed. This government is now serious about its commitment to the Decent Homes Standard and is showing increasing frustration with those authorities and RSL's that are not responding. The role of contractors and their influence in choice of partner has never been greater; all those involved in the public sector need to realise this and realise the need to understand and embrace the principles of partnership, quickly.”
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The Bowater Windows Report, a quarterly trends survey, is produced by Michael Rigby Associates and sponsored by Bowater Windows Ltd in conjunction with Fabrication and Glazing Industries. The aim is to keep a finger on the market pulse, and to monitor fabricators' views and expectations of market movements. The survey covers a representative sample of 100 window fabricators. Telephone interviews took place between the 1st and the 13th October 2003 across a balanced spread of size of firm, geographical area and type of fabricator. Numbers employed was used as an indication of company size. The categories are small (1-19 employees), medium (20-49) and large (over 50 employees).
© Copyright Michael Rigby Associates 2003 |
