AMA Research are pleased to announce the publication of the 9th edition of the report 'Wall Cladding Market Report - UK 2014-2018 Analysis'. Incorporating original input and secondary research, this report represents an up to date and informed review of the market and the report provides an analysis of a number of product categories, outlined below:
The sector has experienced a volatile period, though the more recent performance offers some optimism for improvement in the short to medium term future. The recent upturn in demand has been underpinned by improvements in investor confidence, the Help to Buy scheme, energy efficiency measures and increases in activity in key sectors - most notably private housebuilding, London commercial offices, waste management & renewable energy facilities and social housing RMI. The sector is expected to show continued growth over the medium term, though there will be significant variations in demand between the different cladding materials.
Key areas of opportunities over the next two years are likely to be; the housebuilding sector, due to the ongoing housing shortage; waste management and energy from waste facilities, mainly underpinned by EU 2020 targets for recycling and renewable energy; 'Internet' retailers' warehousing, driven by the trend towards online shopping; energy efficiency legislation, which is driving up the need for external wall insulation.
A. Steadman & Sons, Acheson and Glover, Aggregate Industries, Alumasc Facades, Ash and Lacy Building Systems, Besblock, Blyweert Beaufort Aluminium (BBA), Bovingdon Brickworks, Brickability, C A Building Products, Carlton Main Brickworks, CemBrit, CEMEX UK, CEP Group, CGL Systems, Coverworld UK, Dryvit UK, Euro Clad, Eurobond Laminates, Firth Steels, Formica UK, Forticrete, Hanson Building Products, Hydro Building Systems, Ibstock Brick, IKON Aluminium Solutions, Interfuse, James & Taylor, Kawneer UK, Kilwaughter Chemical Company, Kingspan Insulated Panels, Lignacite, Malling Pre-cast, Marley Eternit, Metal Technology, Michelmersh Brick & Tile Company, Northcot Brick, Parex Ltd, PD Edenhall, Permarock Products, Plasmor, Plean Precast, Powerwall, Raeburn Brick, Remmers UK, Reynaers, RigiSystems, Saint-Gobain Weber, Schüco International, Sto Ltd, Tarmac Topblock, Tata Steel Panels and Profiles, Taylor Maxwell & Co, Techrete (UK), Telling Architectural, The Marble Mosaic Company, Thomas Armstrong (Concrete Blocks), TI Tiles International, Trespa UK, Umicore Marketing Services UK, Wetherby Building Systems,Wienerberger.
Construction forecasts for key end-use sectors 2014 - 2018; assessment of potential market drivers including; new orders, The Green Deal and Energy Company Obligations, demand for waste management infrastructure and energy from waste plants, the growth in online retailing and the need for additional warehousing.
Including facing bricks, rendered block and insulated render systems, we estimate that the total installed wall cladding area declined from over 45m m in 2008 to 39 m, before showing gradual improvement to 48m m in 2012 and 2013.
The 2009-2011 downturn in the housebuilding, industrial and commercial new work markets impacted on demand for most cladding products and materials, in particular the largest groups - facing bricks, profiled metal panels, artificial stone, metal panels and curtain wall. Since 2011 there has been some improvement in private housebuilding output (albeit set back in 2012 due to the atrocious weather), social housing refurbishment, waste management infrastructure and the Central London office market.
Driven largely by the Help to Buy schemes, and a shift back from flats to houses, demand for facing bricks has outpaced supply, with imports needed to make up the shortfalls. This has been due to the time taken to restart 'mothballed' brick plants combined with a marked shortage of bricklayers. Energy efficiency legislation and initiatives (e.g. CERT) and requirements of Part L of the Building Regulations have driven up demand for insulated external walls, in particular render coated external wall insulation systems and composite panels.
The social housing refurbishment sector originally seemed as if it would be a key area of demand for insulated render systems, due to the introduction of the 'Green Deal', and, more relevantly, the Energy Companies Obligation (ECO) in 2013. However, should the government's proposed changes for more moderate targets for solid wall insulation go through, then projected growth levels will be negatively affected. Other potential market drivers for cladding products are likely to arise from the waste management, recycling and renewable energy sectors. As EU recycling and renewable energy target deadlines get ever closer, there is still the need for significant increases in infrastructure capacity if the UK is to meet their targets.
There are a number of large-scale, high-end residential / mixed-use high-rise schemes in and around Greater London scheduled for development over the next few years. However, demand for cladding will possibly be limited to infill panels. Clay, and to a much lesser extent concrete, facing bricks still constitute the largest product group. The other main types of cladding used on private housebuilding developments are rendered systems and artificial stone. Standard rendering such as roughcasting and external wall insulation systems are used extensively on social housing newbuild and refurbishment and in particular in areas exposed to higher than average rainfall and strong winds e.g. Scotland and West Wales.
By value the largest sector is the curtain walling and structural glazing sector, while the share taken by facing brick is considerably lower by value. Other higher value sub-sectors include the high specification zinc, copper and aluminium metal cladding systems, natural stone cladding and pre-cast concrete cladding systems. Over the 2008-2012 period, lower levels of construction activity in the commercial sector have fed through to reduced demand for up-market cladding, particularly unitised curtain wall and other architectural products. Since 2012, there has been renewed demand in Central London office projects and a growing trend among architects for copper and zinc rainscreen systems and roofing.
With so many different types of cladding products on the market, the supply base is highly fragmented, although there is a high degree of market concentration in some sub-sectors. In the clay bricks industry, the top three producers account for around 80% of the market. These companies are also leading suppliers of other types of 'niche' clay cladding material such as brick slips and terracotta rainscreens. However, imports account for the majority of terracotta rainscreen systems installed in the UK.
The metal cladding panel market is a little more fragmented while the profiled panel market is even less concentrated. Systems companies and their approved fabricators / installers mostly account for the lower-middle sectors of the curtain wall market. The remainder of the wall cladding market is highly fragmented in terms of material types and in each sub-sector there are relatively few suppliers.
Over the short to medium term, reasonable volume growth is expected, largely driven by private housebuilding activity and the government's Help To Buy and other affordable homes programmes. Other end-use sectors likely to show increased demand are commercial offices, waste management and leisure, reflecting expected recovery in the commercial new build sector as well as commitments to further expansion in sectors such as waste. However, cuts to public sector capital investment will continue to have a negative impact, leading to declines in demand for cladding on schools, university, MoD and healthcare newbuild works.