AWMS comment: Q2 2017

Steve Durdant-Hollamby, Managing Director Alumasc Water Management Solutions (AWMS)
is BMBI’s Expert for Civils, Metal Rainwater & Drainage

Taking material cost inflation into account, the market for metal rainwater, civil and drainage markets was a few percentage points up in value in Quarter 2, but volume was flat. The surprising results of the election shook market confidence, delaying large projects, with smaller orders making up the shortfall.

Housing and commercial markets continue to do well, but the uncertainty in the market is causing civils projects to be put on hold or shelved. A hung parliament and the ambiguity of Brexit negotiations have knocked consumer confidence, as the referendum initially did last year. But in Britain, London-centric economists, politicians competing for attention, and the media hunting for a headline are too quick to talk the market down!

Even in uncertain times, there are opportunities, for example in bespoke manufacturing and factory-fit solutions where we’re seeing strong and growing demand, particularly from large contractors. This is driven by the skills shortage and the creativity in design and architecture.

The Grenfell disaster has shaken our industry in more ways than one. It will take years before we fully understand what happened and what or who was responsible. However, we believe it will lead to closer investigation of fire resistant products and better policing from testing to installation. It will also lead to specifiers favouring construction materials such as metal over plastic. Already we’ve seen increased interest in BBA approvals within our paint plant and metal rainwater systems.

The cast iron manholes and gratings anti-dumping issue continues. The European Commission is considering an opportunistic anti-dumping claim by a group of European companies against UK manufacturers importing from China or India. If approved, we expect a levy of around 40% on all imported products. It’s frustrating and a concern for the industry. The next hearing is in September.

Export markets remain strong, largely driven by the exchange rate and many UK consultants expanding abroad. Although Quarter 2 was flat, July was busy and the market is still growing so with that in mind and considering the current uncertainty, we expect Quarter 3 to grow a cautious 2-3%.

See the full Q2 Report here: https://www.bmbi.co.uk/the-index/ 

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Launched in 2015, the award winning monthly Builders Merchant Building Index (BMBI) report is the only reliable measure of repair, maintenance & improvement (RMI) activity in the UK. Filling an important gap, it can be widely used in construction, and by economists, Government, national media, commentators and influencers outside the industry.

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