Commercial glazing market looks at a return to positive

Commercial glazing market looks at a return to positive

The UK’s commercial glazing sector is relatively large, and was estimated to be worth over £2.4 billion at installed prices in 2017, according to AMA Research.

The four principal product groups within the commercial glazing market are commercial windows, curtain wall, ground floor treatments and roof glazing. The market is heavily influenced by construction activity in the private commercial sector, with health and education also significant end use sectors.

The commercial glazing market moved slowly out of recession during 2013-14, stimulated by improvements in the Central London office construction sector as well as the education, leisure and retail construction sectors. The market subsequently experienced three years of relatively strong growth between 2014 and 2017, achieving growth rates of 5-7%. This growth was due to significant recovery for several end use sectors in terms of both newbuild and RMI, with the offices sector, in particular, continuing to drive growth. However, in 2017 there was a slowdown, as new orders in key end use sectors declined and investors remained cautious about the potential effects of Brexit.

Excluding the leisure and infrastructure sectors, several end use markets are currently showing low optimism – particularly the office and retail sectors. A number of major office block projects have been completed and new project investment is lacking, although the outlook for more high-rise housing is looking very optimistic in the medium term.

The decline in High Street retailing is likely to continue, as online shopping and out of town shopping centres grow, while the grocery multiple sector is seeing cutbacks to store development programmes for the major established supermarket chains. Growth continues, however, for the newer budget food chains Aldi and Lidl who are expanding at a high rate across the UK, and the convenience sector has also remained positive.

In terms of individual product sectors, AMA Research’s estimates indicate that the largest segment by value is commercial windows, with an estimated share of over 50%. This is followed by curtain wall, which accounts for around a fifth of the market, while the remainder is made up of ground floor treatments and roof glazing, with roof glazing commanding the smallest share. In terms of frame material, aluminium is dominant within the commercial glazing market, but timber, PVCu, steel and composites all have reasonable shares and sector strengths.

While growth in construction is forecast between 2017 and 2019 across the entertainment and leisure, infrastructure and health sectors, underlying annual rates are forecast to decline in commercial offices, education and retail. The combined effect is unsettling in terms of demand for glazing products in the short to medium term.

Increasing average prices are likely to be a characteristic of the market into the medium-term, and this will result in some value growth, but the overall number of commercial glazing opportunities is likely to decline. The issue of pricing will also be affected the performance of Sterling on the foreign exchange markets since the UK is a significant importer of glass, and some glazing systems, as well as a key market for leading non-UK based contractors.

Due to the current uncertain outlook, the commercial glazing market is likely to see no real growth in 2018-19. In the medium-term to 2021, the outlook is for a return to positive, albeit slow annual growth 2-3%. Key to the medium-term prospects for the UK commercial glazing market remains the levels of business confidence and investment which remain uncertain, as the Brexit process leads to postponement of investment and expansion decisions.

Add to Project Board

Create a new project board:

Related Blog Articles