Jeff House, Head of External Affairs Baxi Heating UK (incorporating Heatrae Sadia) is BMBI’s Expert for Water Heating.
The outlook for the wider economy worsened in quarter two with both construction output and the consumer confidence index taking a hit. According to the Office for National Statistics (ONS) construction output was down by 1.3% in Q2, reversing the growth seen in Q1.
Continuing uncertainty over Brexit is partly to blame for this recent slowdown especially with an increased possibility of a hard exit. Bad weather in June also disrupted and delayed work in the RMI sector, giving a mixed picture in terms of build activity. The CPA cites ‘pockets of activity in housebuilding from housing associations and local authorities’ with 39.0% of starts in 2018/19 being funded under the Shared Ownership and Affordable Homes Programme (up from 32.9% in 2017/18), an indication that activity is increasing under this scheme. According to MHCLG data, private residential housing starts fell 7.3% in Q1 2019 against Q4 2018 (seasonally adjusted), a fall on the same quarter last year of 11%. Completions in England fell 0.4% in Q1 2019 against Q4 2018, but this is up 15.2% on the same quarter last year. Activity on major infrastructure projects is helping to offset falls in other sectors, but the CPA has revised its output forecasts for this sector in 2020 and 2021 downwards.
Looking at product performances, hot water cylinder sales were down by 3% as a moving annual total (EUA statistics). This is a product with its fortunes linked to future regulation changes. Although not required when combi boilers are fitted, they will be a positive option if new build specifications change to electric heating to meet environmental legislation.
Two important reports have been issued recently. The first, “Building a Safer Future”, contains recommendations from the Hackitt Review that closed at the end of July. Its proposals have significant implications for, amongst others, those operating in residential buildings with a storey height above 18 metres.
The second report concerns environmental issues with wide policy implications. This was issued by the Green Construction Board (part of the Construction Leadership Council) and has recommendations with regard to the 2030 Buildings Mission. The report aims to show “how achieving the 2030 target to halve all new building energy use over 2018 standards is achievable by tightening energy and systems efficiencies and moving to a culture of transparency on out-turn performance through the measurement of total energy in use.”