Clearview National December 2015 - Issue 169 | Page 39

DOORS&WINDOWS The Rise of the Aluminium Market CAB Chief Executive, Justin Ratcliffe, talks to Clearview about the latest encouraging findings from the Association’s ‘State of the Market Survey’. »»The latest CAB State of the Market figures for Q3, 2015 highlighted that CAB member’s anticipated growth in sales of 75% over the next 12 months, which reflects the strength of the domestic market and how it has been driven by the private housing, industrial and infrastructure sectors. The confidence shown is in-line with the expectations of further economic and construction growth in 2015 and 2016. In response to ten quarters of rising sales, production appears to be increasing and spare capacity absorbed. 39% of members reported they had been operating at over 90% capacity for the past year, and 33% forecast that this could also be the case in the following 12 months. In addition, an anticipated 74% net balances’ increase in plant/equipment investment for the following year, together with other capital investment metrics such as product improvement - signals wide spread confidence in members’ outlook. A further significant positive to contrast with market concerns from the wider construction market place is that 37% of CAB members are forecasting no constraints on activity over the next 12 months. However, costs had risen for 65% of members over the last year and were anticipated to increase by 75% over the next 12 months. Headlines: • Members reported that they anticipate sales rising over the next quarter (45%) and the next 12 months (75%) • Costs continued to rise with 65% reporting a rise in costs in the last 12 months (59% in Q2/2015) and 75% expecting a rise over the next year (68% in Q2/2015) • Wages and salaries (85%) were reported for the 6th successive quarter as the major cost factor closely followed by raw materials (50%), with Fuel Costs (-50% (-14% in Q2)) and exchange rates (-6%) both negative on balance • 39% of companies expected to operate at over 90% of capacity over the next 12 months (40% in Q2/2015) • Headcount increase forecast for the year ahead was 58% compared to 73% in Q2/2015 but was ahead of the wider construction sector figure of 53% net balance • Labour costs had risen over the past year for 53% of members (compared to 80% for the wider construction sector) and 84% forecast a rise in the year ahead • Demand (47%) and Capacity (16%) were once again factors ‘likely constraints on activity over the next 12 months’. Encouragingly though, 37% of respondents stated ‘No constraints’ (24% in Q2/2015) ‘rapid rise in the demand for skilled employment’ Underlying the increased confidence has been the strength of capital investment intentions across all the metrics. In each of the quarters in 2014, there had been a greater commitment (or at least equal) to investment across all the metrics for the 12 months ahead and this has largely continued throughout 2015. The metrics being: property, plant/equipment, customer research, R & D, product improvement and e-business. The outstanding two areas as in the previous quarter were product improvement (80%) and plant/equipment (74%) followed by customer research (50%). The key driver of cost inflation continued to be wages and salaries in Q3, reflecting the impact of the rapid rise in the demand for skilled employment. On balance 85% of members reported that wages and salaries rose over the past year. Reflecting wider developments in the global, fuel costs were lower (for the 5th consecutive quarter) for 50% of members on balance. While a broad decline in large contractors’ order books suggests an element of weakness and uncertainty over the near-term outlook, for CAB members there are still clear signs of confidence ahead. For further information on CAB contact Justin on 01453 828851 or email [email protected] C L E A RV I E W-U K . C O M » dec 2015 » 39