Public Sector Quarterly Trends Report

System10 is sponsoring a new series of Quarterly Trends Reports on the public sector window and door market.

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.

Housing stock

Sixteen percent of Local Authorities we spoke to in this survey expect their housing stock to stay the same in the next 12 months. Eighty-four percent expect it to decrease with transfers to Housing Associations.

Current replacement windows or doors programme

Ninety-five percent of the Local Authorities we spoke to have a replacement window programme. The windows being taken out in the last 12 months are 4% softwood, 17% hardwood and 79% PVC-U. The old windows were replaced with 3% hardwood, 9% aluminium, 16% softwood and 72% PVC-U.

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“We have a planned capital works programme set out for 2004 based on The Decent Homes Standard. This paper has helped us prioritise upgrades to our properties in order to meet criteria.”

Mr Brian Hunt, Principal Building Surveyor
Rockford District Council, Essex

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Frames put out to tender

Eleven percent of Local Authorities say the number of windows and door frames per contract put out to tender has become larger. Thirty-seven percent became smaller and in 52% the numbers stayed the same (chart 2).

	Window and door contracts
	FABRICATION		INSTALLATION
	Last 12 months	Next 12 months	Last 12 months	Next 12 months
DLOs	23%	23%	20%	20%
Direct to fabricator/ installer	26%	32%	26%	26%
Via main contractors	51%	45%	54%	54%
Total	100%	100%	100%	100%

What Local Authorities want from sub-contractors

Local Authorities say they look for window or door sub-contractors who provide quality, reliability, skilled staff, performance, good specification, environmental awareness, design and health & safety. Local Authorities say that quality and skilled staff are the most difficult to find.

Lack of skilled staff and difficulty in setting up partnering schemes were mentioned as particular problems.

Partnering

Those Local Authorities who already have partnering relationships for window replacement programmes or are starting them appear enthusiastic and committed to the benefits - or potential benefits.

There are some pitfalls to avoid and it is clearly easier to talk about it than implement it successfully. Typical problems mentioned by housing specifiers are poor communications and inadequate management from sub-contractors. Not everyone is persuaded but the general experience of partnering is good. Local Authorities see it as fairer and less disruptive with the potential to deliver better value and better service.

Decent Homes Standard

The Decent Homes Standard comes clear top as the most important issue for Local Authorities in the next 12 months (chart 3 & chart 4).

According to Local Authorities implementation could be hampered by funding (the most concerning) followed by skill shortages.

WINDOW FABRICATORS

Sales to Local Authorities

A net* 23% of fabricators who do public sector contracts increased sales to Local Authorities in the last three months compared with the previous three. The bigger the fabricator the more they reported increases.

*The net balance is the difference between the number of organisations reporting an increase over those reporting a decrease expressed as a percentage. A positive net balance indicates growth, a net balance of zero implies little has changed.

Compared with the same time last year, just under a net one in three fabricators supplied more to Local Authorities (chart 5). Larger fabricators saw more of the growth. Fabricators in Scotland (43%) are ahead of other regions but the North (33%), the South (29%) and the Midlands (27%) were also up.

Thirty-nine percent of fabricators reported increases of more than 20%.

Outlook

A net one in five of the fabricators we spoke to expect to supply more windows and doors to Local Authorities in the next three months compared with the previous three.

Looking at the next three months compared with the same time last year a net 15% of fabricators expect to increase sales. Regionally, the South and North (29% and 20%) expect growth. The Midlands expects some slippage (-9%). Scotland forecasts no change.

Prices

A net 9% of window fabricators sold Local Authority contracts at higher prices in the last three months compared with the previous three. Fabricators in the South and North increased prices in contrast to the Midlands where prices eased.

A net one in two fabricators expect Local Authority contract prices to rise in the next 12 months.

Comment

“Continued government investment in the public sector means that one third of all construction is now public sector related”, says Mike Stevenson, Sales & Marketing Director of leading public sector window system, System10. “And the trend looks likely to continue. A growing market thrives on information, so the time is right to launch the Public Sector Quarterly Trends Survey. Sponsoring the survey reflects System10's continued commitment to growing this market.

“The Decent Homes Standard comes top of the list for Local Authorities as the most important issue in the next 12 months in this survey. This reflects the Government's decent home target set out in 2000 to ensure all social housing meets the standards of decency by 2010 in England and by 2012/-13 in Wales. Scotland is still to set a date.

“Running alongside the Decency Standards for existing properties is the key issue that Britain requires between 220,000 and 230,000 new dwellings each year to keep up with demand. In 2002, 169,000 houses were built and the year before that 162,000. Some blame house builders for the shortfall, others the Government. The main problem is that private developers haven't filled the gap left by the public sector. More than 400,000 homes were built every year in the 60's. Half of these by local councils. Social housing is once again a recognised priority, and is destined to become even more important to the economy for years to come. The prospects for providers and their private sector partners are looking good”.

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 6-21 November 2003 across a balanced spread of size of organisation and geographical area. © Michael Rigby Associates 2003 Full report available free: call Kirsten Storgaard on (01453) 521621 or from www.521621.com