Product category:
Soffits, Fascias and Gutterings
News Release from: Freefoam Plastics | Subject: Roofline Quarterly Trends Report
Edited by the Buildingtalk Editorial
Team on 04 June 2008
Roofline grows in challenging economy
Latest Roofline Quarterly Trends Report sponsored by Freefoam Plastics focuses on sales trends and expectations within the PVC-UE Cellular Foam Roofline market.
Sales, quarter-on-quarter A net* 14% of roofline stockists and installers reported higher sales in February to April 2008 compared with November 2007 to January 2008
This article was originally published on Buildingtalk on 17 Jun 2003 at 8.00am (UK)
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(*The net balance is the difference between the percentage of companies reporting an increase over those reporting a decrease.).
More small companies (net 27%) increased sales than mid-sized and large firms (7%).
Companies in the North (29%) and South (13%) sold more but firms in the Midlands reported no change.
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Both specialist installers (net 11%) and specialist stockists (4%) improved sales.
Sales, year-on-year.
On balance, 3% of roofline stockists and installers sold more between February and April 2008 than in the same three months of 2007.
Small (net 6%) and large (4%) companies saw sales increase while mid-sized firms reported no change.
While a net 29% of companies in the North did better, those in the South saw no change and a net 20% in the Midlands sold less.
On balance, 12% of specialist stockists improved sales but a net 26% of specialist installers saw sales fall.
Sales forecasts.
A net 36% of stockists and installers expect better sales between May and July compared with the previous three months.
Large and small firms (net 46%) are most positive.
Companies across all regions forecast growth, particularly those in the North (net 47%).
Both specialist stockists and installers (net 35%) anticipate sales improving.
Year-on-year, firms are less bullish.
A net 5% of stockists and installers forecast a rise in sales.
Small and large firms (net 9%) expect growth but mid-sized companies anticipate no change.
A net 32% of firms in the North predict higher sales whereas on balance, 2% of companies in the South and 12% in the Midlands expect lower sales.
Specialist stockists (net 6%) are more upbeat than specialist installers, 11% of whom forecast a drop.
Profits.
A net 10% of companies forecast better profits in the next 12 months compared with the last 12 months, falling somewhat since the last trends report.
Large companies and those in the North (net 45%) are most confident about increasing profits.
Specialist stockists (net 12%) expect higher profits while a net 5% of specialist installers predict a fall.
Employment.
On balance staff levels among roofline stockists and installers remained unchanged compared with three months ago.
Capacity.
Overall, 40% of roofline stockists and installers are currently working at capacity, which is generally mirrored across companies of all sizes and regions.
Buying Prices.
A net 62% of stockists and installers reported an increase in material costs compared with three months ago.
More small and large firms (net 74%) saw buying prices rise than mid-sized companies (net 47%).
Companies in the Midlands (net 88%) were more affected by rising costs than those in the North (71%) or South (43%).
Selling Prices.
A net 22% of roofline companies put up prices compared with three months ago.
More mid-sized (net 28%) and small companies (21%) increased prices than large firms (13%).
On balance, 30% of companies in the North and Midlands raised prices compared with 13% in the South.
A larger number of specialist stockists (net 27%) increased prices than specialist installers (net 11%).
A balance of 52% of stockists and installers expect to put up their prices over the next 12 months compared with the previous 12 months.
Expectations are strongest among mid-sized firms (63%).
Stock levels.
A balance of 12% of roofline stockists and installers reported an increase in stock levels compared with three months ago.
Stocks grew most amongst small firms (net 33%).
Companies in the North (net 29%) and South (15%) saw stocks rise, whereas firms in the Midlands (10%) made reductions.
Investment intentions.
A net 13% of stockists and installers expect to invest more on buildings and equipment over the next 12 months compared with the previous 12 months.
Large firms (net 33%) and companies in the North (net 32%) were most likely to increase investment.
Prospects.
A net 3% of firms are less optimistic now about the overall prospects for the roofline market than three months ago.
This is mirrored across the board with the exception of large firms (net 17%) and companies in the North (net 29%) who are more confident about prospects.
Problems.
Price cutting in the market (73%), margin squeeze (72%) and a lack of confidence (67%) were the top three problems facing companies between February and April.
Low sales volume and price cutting in the market were both mentioned by 15% of companies as their single biggest problem.
The Internet.
Eighty three percent of respondents say their company uses the internet regularly i.e daily or weekly and only 9% never use it.
Forty percent of firms using the internet place orders with suppliers online and 92% have a website of their own.
Of those that have a website, 30% claim to offer customers the option to order online.
Overview.
"The last few months have seen some of the most challenging economic conditions for many years", says Neil Parsonson of Rigby Research, which produces this report.
"The squeeze on credit has hit the housing market on all fronts".
"New mortgage approvals in March 2008 were 46% below the same month in 2007 and the lowest number recorded by the British Bankers Association since 1997".
"The range of mortgage offers has been heavily reduced and the days of loans exceeding 100% of a property's value are over".
"Twenty one percent fewer homes were sold in the last six months of 2007 compared with the same period 12 months previously".
"The credit squeeze has also hit the High Street and consumer confidence has faltered.
BandQ, Homebase and Travis Perkins have all issued warnings of difficult times.
However, overall retail sales for the first quarter were up 2% on 2007 despite weaker than expected results for March".
"The CBI is forecasting UK growth of 1.7% this year, some way below the Chancellor's expectation and well below the 3.1% achieved in 2007".
"But talk of recession is premature".
"Record numbers are in work".
"Further cuts in interest rates may follow and an additional GBP50bn has been injected into the banking system to ease the availability of mortgages".
"But - and it's a big but - if consumers want something enough they will go and buy it.
For example, sales of new cars to private buyers in March (traditionally the biggest month of the year) were down just 2.2% compared with March 2007, which means 97.8% of the market was still there.
Consumers able and prepared to spend large amounts are out there and spending freely.
The over-50s 'grey' market in particular is unaffected and well positioned to make purchase decisions"".
"Comment.
"Roofline companies are facing some difficult challenges but the outlook remains positive" says Tony Walsh, Managing Director of Freefoam, which sponsors this survey.
"Raw materials costs have been rising significantly and there is little sign of things getting any easier, especially as Sterling is weaker.
With crude oil prices regularly breaking new barriers and no evidence of oil production being increased to meet demand, we're going to have to live with the consequences for the foreseeable future.
China's insatiable demand for raw materials is also leading to shortages, resulting in further pressure on prices".
"The impact is being felt at every level of the market"".
"Resin manufacturers face the brunt of higher oil prices, which is affecting the cost of materials, manufacturing process energy and transport - and are passing on the increases".
"The rising price of additives is also contributing to higher raw materials costs for extruders - who in turn are raising prices to stockists".
"At the end of the chain are installers, who face charging more in a market where fewer homeowners are moving - a major driver of repair and refurbishment work.
"Despite these challenges, the roofline market remains positive.
Marketing the benefits of undertaking roofline refurbishment with quality PVC-U products is key to attracting purchasers and this applies to both manufacturers and installers alike.
With fewer property buyers in the market, people planning a move need to ensure their home is well presented.
New fascias and soffits will create a positive first impression and the additional value derived can well exceed the investment.
For others, the prospect of ending regular roofline maintenance and improving structural soundness are important benefits to promote.
"Interest in colour is growing fast but this remains an under-exploited opportunity for homeowners to give their property a stylish make-over".
"In contrast, installers who primarily sell on price in an effort to win market share risk operating with unsustainable margins and damaging the market for everyone else".
"So give people valuable reasons to buy your products and the market will respond positively".
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