BMBI Expert Andy Williamson, Group Managing Director IKO plc, comments exclusively on Roofing Products for Q3 2015
The Builders Merchant Building Index is just a few months old, but year on year comparisons show RMI lagging behind housebuilding and infrastructure.
Construction Products Association (CPA) figures, which were better than some of us were experiencing, are heavily influenced by housing and infrastructure. Media commentary also draws conclusions from published results of listed housebuilders and large companies focused on bigger infrastructure projects. But few of them have much to do with RMI.
Overall, Roofing is marginally down compared to the main heavy building materials which are 1.9% up on last year (Q315 compared with Q314).
Pitched roofing, which includes tiles, slates and associated products and is the larger roofing sector, was focused on getting higher performance products into stock in the first half of 2015, so roofers and builders meet new regulations and use the appropriate breather membranes. These prevent wind uplift and air ‘ballooning’ which might dislodge tiles or slates in expected more extreme weather events.
Flat roofing is down overall, but this disguises significant changes in types of roofing. Liquid products and EPDM are up, but bituminous based roofing, flat roof and commodity products eg for shed felt markets are down more than 10% on last year because of fewer storms and skills shortages.
The skills shortage is a big, ongoing problem for the industry. Lack of skills has become a drag on growth. Since 2008, the CPA reports that 390,000 people have left construction yet with construction numbers up the mix must have changed significantly which goes some way to explain why RMI is performing below trend.
Water management and energy efficiency will be key drivers in roofing. Insulation values will increase but the government has eased regulations, so the challenge is to persuade builders directly, because energy efficient roofs cost more to install. Builders generally build ‘cold’ flat roofs rather than warm well insulated ones.
Looking ahead, the first quarter is generally poor: winter is not roofing weather. But we expect commercial RMI eg schools, universities, renovations to hold up well in 2016. Domestic RMI remains a concern because of the skills shortage.
Download the Full Q3 report here