Encon Insulation comment: Q4 2017

Mike Beard, Merchant Development Director Encon Insulation is BMBI’s Expert for Insulation Products – Distribution.

In general the insulation market is strong with good demand and positive indicators. While some commentators see ‘doom and gloom’ in housing and construction, I believe this is a market with a bright future.

Opportunities for the insulation sector are, of course, linked closely to housing demand. They also come from rising consumer interest and statutory levels in energy efficiency, for new build and existing housing stock.

The government has again stated its commitment to a new housebuilding program – the latest figure standing at 300,000 new homes a year. While there are many supply and labour issues to solve to come even close to achieving this, it is a strong statement of intent. House prices are settling in some metropolitan areas but nationally housing is a growing market, with growing expectations of energy conservation standards.

Such standards may result from the targets in the government’s October 2017 ‘Clean Growth’ strategy, to improve the energy efficiency of business and industry by 25% and homes by 13%. This strategy can only fuel demand for more insulation as well as creating demand for new innovative solutions, all adding potential value to the supply chain. In addition to opportunities in the new build sector, the U.K’s rented sector includes some of the least energy-efficient housing stock in Europe – a key area where insulation improvements are needed.

In times of uncertainty and opportunity, the sector needs to be resilient, for example in dealing with continuing PIR insulation product shortages. However, while spikes and shortages continue, a good distributor should be always on hand to advise on alternatives.

Finally, the demise of Carillion shows that “big is not always beautiful” and hopefully lessons will be learnt by businesses of all sizes. Market focus may now be less on price and more on quality, delivery and partnership leading to a more sustainable industry model.

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