Mike Beard, Merchant Development Director Encon Insulation is BMBI’s Expert for Insulation Products – Distribution.
The uncertainty of Brexit continues to influence the insulation distribution sector with confidence seeming to be fragile. We welcome a positive performance for Q1 2019, with a milder winter than last year helping construction. Sales figures have not been as strong, however, as some in the industry anticipated.
The strength of regional new build continues to boost the sector – especially in cities outside the South East. In the Repair Maintenance and Improvement (RMI) sector the picture is more subdued. People are spending cautiously and, in addition, the number of property transactions remains low.
Significant growth opportunities for insulation manufacturers and suppliers include the government’s ‘Clean Growth Strategy’. In particular, this quarter we saw further reports from the Committee for Climate Change (CCC), who advise the government on building a low carbon economy. Their ‘UK Housing: Fit for the Future?’ report was published at the end of February. It cites the importance of work on the existing housing stock: “Decarbonising and adapting the UK’s housing stock is critical for meeting legally-binding emissions targets by 2050 and preparing for the impacts of climate change.” There is also increasing public pressure from a wider climate change agenda led by the Extinction Rebellion activist movement.
The key to actual change in the insulation market will be strong legislation from government, followed by similarly robust implementation from local government and other authorities. This will galvanise further the huge opportunity for all types of insulation sales and distribution.
Whenever Brexit is finally decided, there is the possibility of a positive bounce for the insulation sector, given these market opportunities and environmental changes. We still have to deal with issues such as product and labour availability, but we hope that overall the market can move forward and grow.
Encon continues to support the independent merchant sectors during these times of change and opportunity, but we do need Brexit to be sorted in order to release the brakes!