Andy Williamson, Group Managing Director IKO plc is BMBI’s Expert for Roofing Products.
The pound has lost 8-10% of its value against the dollar over the last month or so. Few expect sterling to recover in 2016. This drop in value is having immediate effects. Here and now, it’s a challenge and an opportunity for the roofing industry.
Imported components, finished goods and raw materials will bump up the cost of living. Come September many of these price rises will be feeding through to industry and consumers. Britain will be getting used to a higher cost of living. That will be a shock, and RMI will come under inflationary pressures in the second half of the year with a potential rise in fuel costs, groceries and everyday goods. Over time it will feed into wages and salaries, although at a weaker and slower rate.
The more the cost of imports rise, the greater the opportunities for UK manufacturers like IKO to take market share. But as many roofing products are oil based, product prices will also rise if raw material costs go up.
Specification in the roofing sector has had a slow start this year, but funding and new projects are slowly coming through now. Post referendum, we have the opportunity to invest in major projects to improve the UK’s infrastructure, and the need for more housing is not going to change. Analysts and forecasters were quick to write down the value of housebuilder shares and the prospects for housebuilding. Yet the NHBC recently reported 41,222 new homes registered across the UK in Q2, the strongest housebuilding quarter since 2007. I expect the trend to continue for the rest of the year. So the second half of the year will be busy – though this comes with its own challenges as skills shortages are still an issue.
The correct choice of roofing material for a particular type of roof and project is one of the biggest issues in roofing. Before assuming a favoured product is the right choice, eg single ply, mastic asphalt or hot melt, specifiers and contractors need more dialogue with suppliers who can advise what is best in the circumstances. The larger the project the more important it is to make the right choice.