The Business Pilot Barometer'MONSTER' GROWTH ON THE WANE?Is demand for windows and doors “dropping back to more sustainable levels”? the latestBusiness Pilot Barometer suggests so...The latest analysis of the key trends definingwindow and door retail, provided by theBusiness Pilot Barometer, has hintedthat demand may be “dropping back to moresustainable levels” following the “exponentialgrowth”seen in June which has put pressure on thewhole supply chain.In his headline analysis of the Business PilotBarometer Edition 8: June/July/August 2020, NeilCooper-Smith, senior analyst, Business Pilot,said: “There is a hint – only a hint – that some ofthe heat is coming out of the market and that enduser-demand, for the moment at least, may bedropping back to more sustainable levels.“We reported last month that new leads haddropped by 17% on June. The caveat here wasthat June was a ‘monster’ month, up 46% on May,which also saw exponential growth in demand.This translated into this month in an extension oflead times from initial enquiry to conversion froman average of 11 working days to 15.“With it evident that the pressure isn’t only beingfelt by installers but that the window and doorsupply chain as a whole is ‘creaking’ under thepressure of demand with shortages of glass;some profile types; hardware and reinforcements,a 23% drop in sales in August, may not beentirely unwelcome.“Leads also fell away on July, down 26%.Combined this might be cause for concern – butwe don’t believe we’re there yet. Covid-19, hasrewritten the rulebook.“First, if we compare figures for May andAugust, sales and leads are pretty comparable,with sales and lead generation in August stillcoming in a few percentage points higher – sono need to panic quite yet! There may also besome specific factors to take into account. Themiscommunication around the Green Homes Grantmay have temporarily cooled the market a littlebut we don’t believe it had a big impact on salesin the longer term. In the same vein it appearsthat its potential to exert a positive impact onthe window and door industry is also limited.This we suggest means its impact will be neutraloverall, with any postponed sales likely to comethrough this month as it becomes clear that veryfew homeowners will qualify for funding for newwindows and doors. The far bigger influences areunemployment, the end of the winding down ofthe furlough scheme and the housing market.”Summer boom“While the window and door industry has seena boom throughout the summer, nationally GDPto June fell by 20.4% – more than any othercountry. With the furlough scheme coming to anend, this has led to some fairly alarming forecasts,including a warning from the Bank of England thatunemployment could hit 2.5m by Christmas. Thiswould suggest far tougher trading conditions forwindow and door companies by the end of theyear – but then this is Covid-19 and as we havehighlighted, the ‘norms’ don’t apply.At the same time as being in the second deepestrecession on record, the UK is seeing a housingboom, with, according to new figures fromNationwide this month [Sept], prices soaring attheir fastest pace for 16-years of two percent.This it attributed to the release of latent demandand the Stamp Duty holiday.“With the fortunes of the window and doorindustry traditionally going hand-in-handwith those of the housing market, house priceinflation and high levels of activity would suggestdemand will continue into the New Year, despitepotentially lower levels of consumer confidencein the main. Either way, window and door salesfigures suggest a release of some pressure fromthe market going into the autumn.“The final notable change to comment on is theincrease seen in average order values in Augustcompared to July. These increased from an averageof £3,554 to £3,864, a 9% uplift, which may indicatea shift away from single purchases as seen overthe summer to wider replacement packages.“This would be consistent with increased fragilityin consumer confidence as a whole and the‘running-out’ of holiday refunds; and a shift tomore comprehensive projects linked to movementin the property market.”Contact Business Pilot:0333 050 7506www.businesspilot.co.uk@BusinessPilotUK14 T I SEPT/OCT 2020 PRACTICAL CONTENT FOR THE GLAZING INSTALLER & HOME IMPROVEMENT SPECIALIST
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