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EUROPEAN SCENE: To hell in a hand-cart

That is the UK window industry,
off to hell in a hand-cart. At least you would think so listening to
some people. Currently we have a few problems. Fuel prices through the
roof, rising food prices and the banks refusing to lend money to anyone
(more about them later).

Wheeeeeeeee… there they go!

That is the UK window industry, off to hell in a hand-cart. At least you would think so listening to some people. Currently we have a few problems. Fuel prices through the roof, rising food prices and the banks refusing to lend money to anyone (more about them later).

Our own industry gurus, like Robert Palmer from Palmer Market Research, are predicting a general decline in the window market until 2012. Different reasons for different sectors, but that’s the picture. The rent-a-gobs that populate the news programmes on
BBC Radio Four at times like these have the whole UK economy in terminal slide. A month or so back, they had the planet on the brink of imminent destruction, now it’s the UK. I am not sure if it is quite the same people, but they sure sound the same.

The industry situation is more complicated. First of all it is segmented. The guys making aluminum windows tend, in the main, to service the construction sector – curtainwall, that kind of thing. The vinyl guys generally make windows for housing.

The problem here is that the sector arose from the need to replace all of those rotten wooden windows so beloved of generations of UK house builders. Well, they did it. Well done guys! So now their problem is what to do next?

House builders have switched on to vinyl these days but don’t build enough. They don’t have the land and often cannot get planning permission. It is all very political. This is a crowded, overpopulated island is the received wisdom. When did you last look out of your window as your airplane crossed our west coast? The entire UK population lives on about 10 percent of the landmass. Preserving the ‘green belt’ is seen as a good thing even by people who never leave town. Meanwhile, apartment blocks are going up in the middle of towns on closed down gas stations and pub car parks.

Then we have the problems being caused by the banks. Having gone about borrowing money from each other like a student with his first credit card, they lent the money to other people, some of them having no more prospect of paying it back than, apparently, the banks did themselves. Then they panicked and started to demand their money back from each other. Suddenly, surprise, surprise, we are all picking up the bill. The government is now using our taxes to bail out the banks by making huge amounts of money available for them to borrow. A bit like the ads you see on TV offering to round-up all of your debts into one big ‘affordable’ loan.

According to the rent-a-gobs, houses will be repossessed willy-nilly, we will never see cheap loans again and the banks’ tougher criteria will severely restrict the ability of all but the most blue-chip customers to borrow anything at all. This seems to suppose bankers are capable of learning something.

First of all, according to industry sources, repossessions are not rising. With high employment, most borrowers are servicing their loans, if in some cases with difficulty. Secondly, we’ve been here before. Okay, fuel prices and food prices are rising too but we have been there before as well. Soon the banks will have refilled their coffers and secured their million pound bonuses. The gold cards will, once again, fall through our letter boxes like confetti. That 100 percent, low fixed rate, umpteen times income mortgage will again be thrust upon willing customers.

Meanwhile, people still need windows. Some need conservatories and doors. Some will even have cash. The serious window makers I talk to are busy, but all agree, you have to
look for opportunities. There is a problem of oversupply and to survive, companies will have to look at their business models. Conservatories, which are basically a load of windows under a roof, and doors are both strong markets. Overall the prediction, even in this challenged market, is for a not inconsiderable nine million vinyl windows to be manufactured this year.

*John Roper is editor for the Installer, The Fabricator, The Conservatory Installer and Glass Works magazines published in the UK. His comments reflect opinions from the UK and may not be applicable in Canada.