Product category:
Soffits, Fascias and Gutterings
News Release from: Freefoam Plastics | Subject: Freefoam Roofline Report
Edited by the Buildingtalk Editorial
Team on 05 December 2007
Latest Freefoam Roofline Report
Lively roofline market despite rising costs and uncertainty sales, quarter-on-quarter.
The Freefoam Roofline Report A net* 35% of roofline stockists and installers reported better sales in August to October 2007 compared with May to July 2007
This article was originally published on Buildingtalk on 17 Jun 2003 at 8.00am (UK)
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Of those reporting an increase, 36% saw sales go up by 20% or more.
* The net balance is the difference between the percentage of companies reporting an increase over those reporting a decrease.
More mid-sized (net 42%) and small firms (36%) increased their roofline sales than large companies (22%).
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Fewer stockists and installers in the Midlands (24%) saw sales increases than elsewhere in the country (41%).
On balance 47% of specialist stockists increased sales compared with a net 15% of specialist installers.
Sales, year-on-year.
A net 36% of stockists and installers increased sales in August to October 2007 compared with the same three months of last year.
Mid-sized (net 47%) and small firms (36%) were ahead of large companies (17%).
A net 54% of stockists and installers in the South sold more roofline that those in the Midlands or North (25%).
Again, specialist stockists (net 43%) did better than specialist installers (15%).
Sales forecasts.
A net 43% of stockists and installers forecast a seasonal reduction in sales between November and January compared with August to October but almost one in three companies are confident of maintaining sales volumes.
Large companies and those based in the South were least optimistic about the sales outlook.
A smaller net percentage of specialist installers (-32%) anticipate lower sales than specialist stockists (net -65%).
Year-on-year a balance of 16% of stockists and installers expect sales to increase in November 2007 to January 2008 compared with this time last year.
Profits.
A net 43% of companies forecast higher profits in the next 12 months compared with the last 12 months.
This is up from three months ago.
More small and mid-sized firms expect profits to improve (net 49%) compared with large companies (26%).
Companies in the South (net 49%) feel most optimistic about increasing profits compared with stockists and installers in the Midlands and North (net 40%).
Companies that both supply and install roofline (net 70%) are twice as confident of better profits than those that only install or only stock roofline products (36%).
Employment.
A balance of 12% of roofline stockists and installers took on more staff compared with three months ago.
Only 3% of companies reported reductions in numbers employed and these tended to be larger firms and companies in the Midlands.
Capacity Overall, 56% of roofline stockists and installers interviewed said they were currently working at capacity.
Large firms were least likely to be at maximum capacity (39%).
Buying Prices.
The proportion of stockists and installers reporting materials price increases has gone up significantly.
On balance just over three quarters of those interviewed saw costs of materials go up compared with three months ago.
No firms reported a reduction in materials costs.
Large firms appear better able to resist price rises (net 57%) than mid-sized and small firms (net 83%).
Selling Prices.
In the face of rising costs, a net 48% of roofline companies reported higher selling prices compared with three months ago.
Firms in the Midlands seemed less ready to raise prices (net 35%) compared with those in the South (net 49%) and North (net 62%).
A balance of 73% of stockists and installers expect to put up their prices over the next 12 months compared with the previous 12 months - broadly in line with the proportion currently experiencing materials increases.
Stock levels.
A balance of 20% of companies reported increases in stock levels compared with three months ago.
More small companies (net 33%) built up their stocks than mid-sized companies (22%), whereas large firms cut stock levels (net -7%).
Investment intentions.
Investment intentions are unchanged in this quarter's survey, with a net 18% of stockists and installers expecting to invest more on buildings and equipment over the next 12 months compared with the previous 12 months.
However a net 3% of companies in the Midlands expect to cut capital investment compared with a net 28% of those in other parts of the country expecting to spend more.
Prospects.
A net 20% of stockists and installers are more optimistic now about the overall prospects for the roofline market than three months ago.
Specialist stockists and companies that both stock and install were most optimistic (net 29%).
Problems.
Supplier price rises (63%), margin squeeze (52%) and price cutting in the market (51%) were the three most frequently cited problems for stockists and installers in August to October 2007.
In the North, price cutting was the most common problem (72%).
Only 5% of companies reported no problems at all.
Price cutting was the single biggest problem, mentioned by 17% of those interviewed.
The Internet.
Eighty percent of respondents say they use the internet regularly i.e daily or weekly and only 11% never go online.
Twenty five percent of firms with internet access place orders with suppliers online and 78% have a website.
Only a third say they offer customers the option to order online in some way or another.
Overview.
"Global economic growth in 2007 is expected to exceed 4 per cent for the fifth year running", comments Mike Rigby, whose company Rigby Research produced this report.
"Emerging market economies continue to power ahead, producing a level of sustained confidence not seen for over 30 years".
"Recent economic statistics, including industrial production, have shown that the Eurozone economy is in robust shape despite a weaker-than-expected second quarter".
"Third quarter growth figures are expected to show a significant rebound, despite the recent turmoil in financial markets".
""Problems associated with the sub-prime loans market are now well-documented and the resulting impact on housing markets in the US and UK is clear to see, with sales volumes falling and price inflation cooling fast.
But this still produced year-on-year price growth in September of 8.7% in England and Wales, according to the Land Registry.
Although mortgages will be harder to come by in the immediate future, homeowners seeking loans for improvements such as roofline refurbishment should find little difficulty in obtaining the necessary funds.
Further rises in interest rates now seem less likely.
The slowdown of growth in High Street sales attributed to the Bank of England's series of quarter-point increases over the past 12 months had the desired effect.
Despite Northern Rock and housing concerns, people still seem confident in borrowing to fund roofline and similarly sized home improvement projects.
Comment ".
""One of the issues highlighted in the research is the growing importance of colour products to stockists and installers", says Tony Walsh, Managing Director of Freefoam, which sponsors this survey".
""Around two thirds of them consider it to be either 'important' or 'very important'".
"However within Great Britain the market remains dominated by white product and the adoption of colour has been slow".
"Contrast this with Ireland, where colour is growing rapidly and accounts for around 50% of the market both north and south of the border".
""As consumers see little obvious differentiation between similar white roofline, installers compete vigorously on price to capture business - and margins suffer.
In addition, waiting for householders to replace their existing white roofline with new white fascias perpetuates a reliance on the distress market.
The answer is to give people what they want - more colour - whether wood grain to match windows and doors, brick-matches or more distinctive 'fashion' shades, such as blue or cream.
Offering a range of colours encourages more homeowners into the marketplace - with the added potential for them changing their roofline colours as part of their regular redecoration activity".
"Within England, Scotland and Wales the market has been slow to exploit these opportunities".
"The benefits for stockists and installers of offering a wider choice of colours are clear".
"Better differentiation from competitors will result in stronger marketing opportunities - resulting in higher conversion and improved margins".
The Freefoam Roofline Report, a quarterly trends survey, is produced by Rigby Research (a division of Michael Rigby Associates), and sponsored by Freefoam Plastics .
The survey covers a representative sample of 100 roofline installers and stockists (including builders' merchants) of PVC-UE cellular foam products.
Telephone interviews took place between the 5th and 16th November 2007 across a balanced spread of size of firm and geographical area.
For survey details or a copy of the full report call: Stephanie Bradfield on 01453 521 621 or visit www.rigby-research.com.
copyright Rigby Research 2007.
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