First and foremost, a very happy New Year to you all!
I hope that you enjoyed some well-earned downtime over the Christmas and New Year period and that you suitably indulged as I did. Needless to say, the healthier food is back in the fridge and the beer is out of sight for a little bit!
2022 was one of those years where you breathed a sigh of relief. A very different market compared to 2021, fraught with all sorts of varying challenges and difficulties. Speaking to some of my contacts as the year ended, it was VERY hard work to end ahead of 2021.
The problems the UK, our economy and indeed our own sector faces are well known. Inflation remains a problem. We’re likely at the start of a prolonged recession. Energy bills continue to rise despite Government support. There are strikes all over the place. 2023 is going to be a hard slog, and there are going to be casualties in our sector as a result.
That being said, wherever there are problems there are also opportunities. It is during this recession that UK fenestration needs to read between the headlines and understand where there are avenues to pursue. In a separate post to this, I will explore some of the specific products that I think we should be focusing more on to exploit growth this year. But for now, I want to take a more generic look at where I think we can find some success this year.
Shouting the energy-efficient message
2023 will be a year where the cost of energy remains front and centre. Even with Government help, the cost of gas and electricity for homes and businesses continues to rise. Over the past few days, there has been a recent focus on falling wholesale gas prices, with costs dropping significantly. I hope that consumers will see the effects of that drop in the coming months.
Still, compared to 2020 and 2021 levels, energy costs have risen massively, which then put a focus on reducing costs for households where they can. The fenestration sector is in a position to be able to help. New energy-efficient windows and doors can save hundreds of pounds per year by keeping valuable heat indoors. With the main part of Winter still ahead of us, our sector has to make the most of this valuable USP and target its marketing to consumers to emphasise the energy-efficient message. There are millions and millions of homes that are in desperate need of retrofitting to bring them up to scratch. Our industry has a major part to play in that effort and so we should find a lot of success down this particular path.
Falling house prices
Hear me out. Usually, our industry likes rising house prices as homes sold for major profits see those profits reinvested into new homes, often into home improvements like new windows and doors.
However, the market is turning, and there are some early signs that the drop in house prices is picking up speed and there is a small chance the reversal in prices could be quite sharp. So why is this an opportunity?
House prices have risen for so long and so sharply, that even with a hefty price reversal, homeowners will still be sitting on profits. But, falling house prices may force a rethink for some people on whether to move or improve what they already have? With at least 250,000 homes per year for the next few years facing higher mortgage costs, many may believe that investing in their current home, which is a cheaper endeavour than moving altogether in a lot of cases, is a better use of their money. If this scenario plays out, our industry can benefit from that. Again, we have to get our message and marketing right to make the most of this situation.
High-end resilience
Speaking on my experience from last year at our own installations business, we found the high-end market to remain the most resilient and buoyant despite the tough year we all had.
The self-builders and the wealthy tend to go for the luxury market. Aluminium, flush PVCu, bespoke aluminium entrance doors, bi-folds, large-scale glazed sliders etc. Standard PVCu won’t do for this type of client.
Despite the recession this year and possibly into 2024, the richer bracket of the population will continue to spend on themselves, their homes and their projects. Recessions and energy prices do not affect this demographic like others, so it would be wise for more of our industry to look to this part of the market to find profitable avenues.
The higher-end market has always been more sheltered than other parts of the market. It’s not as easy as flicking a switch and suddenly selling a different way and a different type of product. It takes time, effort and money to alter your own business. After spending much of 2022 changing things at our place I can vouch for that. But the rewards are worth it, and even more satisfying when you know you’re growing in a down market.
2023 will be hard. I don’t think anyone thinks otherwise. But there are always ways to make a success of things, that is a certainty. It’s simply a matter of putting in the work and keeping focused on the end goal.
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