John Duffin, Managing Director Keylite Roof Windows is BMBI’s Expert for Roof Windows.
Quarter three has continued positively as the roof window industry experienced another double-digit growth period. This reflects the increase in construction output reported by the ONS (+2.1% for the quarter) and a record registration of new build homes reported by the NHBC. Their latest report suggested that UK builders registered more than 43,500 new homes in Q3 2018, the highest quarter since 2007. We believe this was due largely to the sustained good summer weather, allowing the industry to more than recover the losses from the poor start to the year.
The growth of white finished product continues to dominate the roof window market: white PVC products now accounts for 25% of Keylite sales. Flat roofing products are also rising in popularity, indicative of the buoyant home improvement market.
The value of sterling has been volatile over the quarter, with no clarity on Brexit and the ‘Deal or No Deal’ scenario. However, sterling’s strengthening at the end of the period suggests that people feel Brexit is likely to become Brino (Brexit In Name Only), with no exit from the Customs Union. While uncertainty continues, the strength of RMI may indicate a trend to improve rather than move home, which is good for roof windows.
We believe manufacturers should ensure they’re prepared for a ‘No Deal Brexit.’ For Keylite, this means increasing our stock holding in our Midlands distribution centre and the use of container logistics on short sea crossings to avoid potential bottlenecks at Dover. Last quarter, we cited consumer confidence and bank lending being pivotal for the long-term market. This is still the case with continued uncertainty as we come into the final few pre-Brexit months.
Online selling remains a threat for the economy despite the relief granted in the Chancellor’s budget for high street retailers. This has implications for builders’ merchants, but unlike some industry partners, we see this as a potential growth area. There may be opportunities for merchants, particularly in partnership with manufacturers who are willing to invest in online support on merchants’ behalf.