Knauf Insulation comment: Q3 2016

John Sinfield, Managing Director Knauf Insulation is BMBI’s Expert for Mineral Wool Insulation.

The initial market uncertainty post-Brexit continued to subside through Q3. Builders’ merchant customers’ mineral wool insulation sales performed well, showing positive growth over Q2.

This adds optimism to next year. We expect to see reasonable mineral wool insulation growth in the residential new build sector and repair maintenance & improvement activity (RMI), which is heavily dependent on consumer confidence.

On that note, the GfK consumer confidence index recovered strongly between July and September, but it seems to have hit a small bump in the road in October. The bump is reportedly due to fears that price rises will hit UK living standards. This cements our feeling that we should remain positive, but not expect too much from the market.

In an attempt to provide clarity for the sector, the Construction Products Association (CPA) released its latest CPA forecast in October. Construction activity overall is expected to remain broadly flat in 2017 and 2018, with a more nuanced picture at sector level. Growth in infrastructure and education is predicted to offset the decline in sectors such as commercial offices and industrial factories.

And just when we start to build a picture of the way we think the market will look over the coming years, we have the ruling that our MPs must vote to trigger Article 50 to formally start the process of leaving the EU. While the correct process must be followed, the last thing the industry, or the UK economy needs is more uncertainty.

The mineral wool insulation market is currently benefitting from a shortage of PUR (Polyurethane) insulation & PIR insulation foam boards and panels. This is due to a global shortage of a key raw material to make the foam. Merchants, being inherently fleet of foot are working with us to offer alternative solutions to their customers, ensuring that insulation activity can carry on uninterrupted.

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Launched in 2015, the award winning monthly Builders Merchant Building Index (BMBI) report is the only reliable measure of repair, maintenance & improvement (RMI) activity in the UK. Filling an important gap, it can be widely used in construction, and by economists, Government, national media, commentators and influencers outside the industry.

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