April 2018

Market Overview
than mineral wool. Conversely, the market value
of mineral wool products has fallen, mainly due to
the fall in demand for such products under the
Green Deal and ECO, but they still account for
almost 30% of the total market in the UK.
The impact of fire retardancy
The issue of fire-retardancy has become
increasingly prominent in the building industry,
and this may be a factor influencing the
insulation market to a greater extent going
forward – particularly in shared accommodation
applications – but whether there will be a
material impact on the product mix remains to be
seen.
Supply structure
The building and technical insulation products
industry is reasonably fragmented in terms of
supply structure and comprises a number of
distinct sub-sectors. Some of the larger
manufacturers and suppliers operate across
several of these, while smaller companies tend to
focus on just one or two. The key supply route for
insulation products are specialist distributors.
Builders merchants account for approximately
one fifth of the market, while the remainder is
split between direct sales to installers, direct
sales to external wall insulation systems
companies, converters and DIY stores.
Market prospects
In terms of market prospects, the market value of
insulation products is likely to show only modest
growth over the next few years, following a fairly
flat market in 2017. Growth is likely to remain
between 1-2% in the short term, with stronger
growth expected towards the end of the forecast
period, something which should help the building
insulation market comfortably exceed its 2012
value by 2020.
Threats to growth
Further falls in volume demand from the
retrofitting sector will lead to lower growth
levels going forward. A decline in output for key
non-domestic construction sectors, such as
offices, as well as slower growth in new
housebuilding is also likely to limit growth, and
Imported prices are expected to rise on both finished products and components
Further falls in volume demand from the retrofitting sector
could lead to lower growth levels going forward, whilst
limited Government funding for this area of the market could
also have a negative impact
the market may also be negatively impacted by
limitations in Government funding for
retrofitting activity, with many homeowners
reluctant to implement insulation-based energy
saving measures without a strong financial
incentive.
Drivers for growth
Of course, there are also positive factors which
will help support growth. Demand for housing
remains strong, and construction levels are
expected to improve, albeit slowly. Rising gas and
electric prices will stimulate demand for relatively
inexpensive means of insulation in the domestic
market such as loft and cavity wall insulation.
“The deteriorating
value of the pound
Sterling will also have
an impact with
imported prices rising
on both finished
products and
components”
Added value solutions will also potentially add
substance to the market, with the introduction
and growth of certain products with claimed high
thermal insulation values creating growth in some
sectors.
Rising imported prices
The deteriorating value of the pound Sterling will
also have an impact with imported prices rising
on both finished products and components or
chemicals, and in turn may lead to some market
value growth, even if volume growth remains
relatively depressed.
Contact AMA Research
01242 235724
www.amaresearch.co.uk
@AMAResearch
58 TC APRIL 2018