Despite the current economic challenges, people are turning to timber windows in ever bigger numbers, according to Chris Brunsdon, managing director of TimberWindows.com, which sponsors the bi-annual Timber Windows Report.
“Recent headlines have made sobering reading – a squeeze on mortgage lending, falling house prices and a tough time for many in the home improvements market place. But it’s not all bad news,” he said. “In a market where the volume of PVCu windows continues to decline, sales of timber windows are up yet again.”
He pointed to the latest report which indicates that more homeowners than ever are prepared to pay a premium over PVCu “to get a product that looks good and will enhance their property”.
“Some installers are afraid of timber’s price premium but I think this is an irrational fear,” said Brunsdon. “Homeowners are happier to pay for something if they know it’s worth it – and most know that putting in timber windows will add value to their property and see it as a sound investment.”
He said the challenge the timber window industry faces is to ensure that the benefits of timber windows are marketed strongly. “For many, the opportunity to restore the character of their home with modern, efficient timber windows is one that needs to be explained and exploited. This will be especially true if a homeowner’s last experience of timber was of draughts and decaying wood. Installers need to play their part in selling the long-term benefits of investing in timber if they are to make the most of a growing market.”
Down but not out
And, while the economic forecast is gloomy, Neil Parsonson of Rigby Research, which produced this report, points out that housing and home improvement may be down, “but not out”.
This is reflected in the survey results. According to the survey, a net 20% of timber window manufacturers increased sales in the six months from September 2007-February 2008, compared with the previous six months (March-August 2007) Seventy-three per cent of those reporting a rise saw growth of 10% or more.
Large firms (60%) did best but small and mid-sized companies (14% and 19% respectively) also sold more. A net 41% of manufacturers in the Midlands saw sales rise compared with 15% of firms in the South and 6% in the North.
A balance of 28% of manufacturers also saw an improvement in the last six months compared with the same six months of the previous year.
More large firms (70%) saw rises than mid-sized (31%) and small firms (19%). A net 55% of Midlands firms saw sales rise, compared with 21% in the South and 13% in the North.
Forecasts for the next six months remain positive. On balance 23% of manufacturers expect to sell more timber windows in the next six months (March-August 2008) compared with the previous six months (September 2007-February 2008). Large firms (60%) are most bullish but small and mid-sized companies (19%) also expect growth. Manufacturers across all parts of the country forecast higher sales.
Similarly, 24% of manufacturers expect to sell more timber windows in March-August 2008 compared with the same period 12 months ago. Large firms (60%) are particularly confident compared with small and mid-sized companies (20%)
Profit expectations
A net 35% of manufacturers expect profits to increase over the next six months compared with the previous six months. More large firms (net 70%) expect profit growth than small and mid-sized firms (31%).
A net 27% of manufacturers report fuller order books compared with six months ago. Large firms (net 80%) were ahead of mid-size (28%) and small companies (17%). More manufacturers in the Midlands (net 41%) have increased orders than those in the South (26%) or North (16%).
On balance, 13% of firms took on more staff compared with six months ago. More large companies (40%) increased their workforce compared with mid-sized (19%) and small firms (5%). A greater number of companies in the South and Midlands (net 18%) took on more staff than those in the North (3%).
A balance of 83% of manufacturers reported higher purchase costs over the last six months and this was reflected across all regions. Large firms (40%) were least likely to have faced increases compared to small and mid-sized firms (88%). Half of all companies facing increases reported rises of 10% or more.
A net 57% of manufacturers put up prices compared with six months ago. This was mirrored across firms of all sizes and in all regions. Of those who raised prices, 40% increased them by 10% or more.
Manufacturers are confident: 30% are more optimistic now about the overall prospects for the timber window market than six months ago. Large firms (70%) are more bullish than small and mid-sized companies (26%). Those in the North (38%) were more optimistic than firms in the Midlands (31%) and South (23%).
On balance, 14% of manufacturers expect to invest more on plant and machinery over the next 12 months compared with the previous 12 months.
Large companies (70%) are most likely to spend more this year compared with mid-sized firms (18%) and small companies (2%). Those in the South and North (18%) are more likely to increase investment than firms in the Midlands (3%).
Looking at styles manufactured, 53% are casements, 35% are vertical sliding sashes, 5% reversible/pivots, 5% are tilt-turns and other styles account for 2%.
Manufacturers report that 74% of softwood windows and 77% of hardwood windows come from a certified or approved sustainable source.
The main problems experienced by manufacturers over the last six months were supplier price rises (74%), margin squeeze (53%), slow payments and bad debts (47%), lack of skilled staff (45%), cash flow (43%) and changes in legislation (42%). However, a lack of skilled staff was the single biggest problem, mentioned by 31% of those interviewed.
