The Crystal Group Comment: Q4 2021

Consumer confidence weakened at the end of the year, according to GfK’s Consumer Confidence Index, no doubt driven down by the threat of further restrictions and a new Covid variant. Heading into 2022, this caution has continued with some people now putting off major spending and purchases such as windows and doors until the full impact of the energy price rises on household bills is known. GfK’s Major Purchase Index which asks consumers ‘Do you think now is the right time for people to make major purchases (such as furniture or electrical goods)?’ fell 4 points to -10 in January.

There was some good news in Q4 with a return to normal service for lead times (within two weeks on standard items) as supplies of resin, PVC-U profiles and glass became readily available. The industry had hoped the price hikes on raw materials and components that were driven by supply chain problems earlier in 2021 would abate, but costs remain high as rocketing energy bills ramp up production costs.

Sustainability continues to be front of mind for the window industry. In December it was announced that amendments to Part L of the Building Regulations will come into force on 15 June 2022. These require replacement windows for existing homes to achieve U-values of 1.4 W/m2K or below, and installations in new build dwellings to achieve an overall value of 1.4 W/m2K. While many of our products already meet or exceed this standard, some manufacturers – particularly those making aluminium windows – will struggle to hit the higher efficiencies required without extensive technical upgrades.

Reducing energy use will remain a major concern for us all. Even well-known retailers are looking at how they can offer energy saving measures to help consumers worst hit by higher gas and electricity bills.

2022 could be a tough year for window sales. Our numbers for the New Year are currently flat against Q1 2021 but given the increased costs we are experiencing, we are down in real terms. It’s the same across the industry. Managing cash flow is going to be a big concern this year, so don’t be surprised to see even profitable businesses struggling.

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