Unsurprisingly , output slowed across the construction industry in Q4 as the effects of the winter shutdown slowed construction . Private house builders reported a cut in demand of up to one-third , likely due to higher mortgages and are concentrating on completing existing sites rather than breaking new ground .

This optimism contrasts sharply against Q3 2023 Expected Sales Volumes where 6 % of CAB Members on net balance expected a slowing in sales volumes for Q4 . In fact , 33 % of members on net balance reported a slowing in output during Q4 . Furthermore , ‘ Sales Volumes - Year-on-Year ’ shows that 66 % of members state their turnover is lower than a year ago , whilst only 20 % state that their turnover is up by over 5 %.

Optimism may be justified as overall the output levels remain strong in the infrastructure and industrial sectors , which may account for the positive outlook where aluminium fenestration is predominantly used . High end residential projects also continue to drive and grow aluminium fenestration sales in the home improvement sector . This activity is boosted by a

strong refurbishment and fit out sector for existing buildings and the conversion of older buildings from commercial to residential applications . These are both markets where slim aluminium ‘ heritage ’ style windows are generally specified .

Costs continue to be under pressure with 67 % of members on net balance expecting costs to increase again in the coming year . This is a rise from 45 % in Q2 . The expected rises in costs are above those of the wider construction industry . Over 2023 aluminium has continued to fall in costs but conflict in the Middle-East could have an influence on costs .

Throughout the past year the review of ‘ Cost Factors ’ confirms that wages and salaries are the major contributor facing members . This is closely followed by energy and fuel costs . The lack of an available experienced labour pool continues to drive salaries upwards as fenestration companies continue to try and retain staff and source experienced staff .

Lack of demand is the single greatest ‘ constraint for members in the Likely Constraints on Activity Over the Next 12 Months ’ graph with 73 % of respondents citing this as a major concern .

The proportion of members operating at over 90 % capacity remains at a low level , barely into double figures for the last three quarters , falling from 33 % in Q1 2023 . ‘ Expected Capacity Utilisation ’, operating over 90 % capacity , for the year ahead is expected to be 33 % of all members compared to just 24 % for the wider construction industry .

Q4 sees an anticipated increase in ‘ Labour Force ’ for the year ahead by 27 % on net balance of members . This has increased since Q2 and indicates some confidence in anticipated sales in the year ahead . Anticipated and past year ‘ Labour Costs ’ remain high with 73 % of members on net balance expecting further increases , this has reduced from 84 % in Q3 .

‘ Historic Exports ’ have generally shown a decrease over 2023 , likely due to the weak exchange rate . In Q4 60 % of members did not export , with the largest sector 25 % only exporting up to 5 % of sales . 7 % of members who responded continue to export over 15 % of their sales .

Members capital investment has increased slightly in Q4 over Q3 with the major spend anticipated to be in new plant and equipment closely followed by investment in product development .

A slowdown in construction equating to just 2.1 % will suggest a sluggish market in 2024 for aluminium fenestration . With new commercial starts slowing , often this is associated with building refurbishment which often includes new fenestration installation . With a reported slow start to the new year due to bad weather and storms it will be interesting to see results of the first quarter 2024 .

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36 FEBRUARY 2024

CLEARVIEW-UK . COM