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The BWF CERTIFIRE Fire Door & Doorset Scheme Quarterly Trends Report
Timber Fire Door Sales Continue to Advance but Expectations Cool"No matter how well or badly a market is doing," says Mike Rigby, whose company Michael Rigby Associates produced this report, "the effects are magnified by how well the UK economy is doing. And increasingly, in this interconnected world, that depends on the health of the global economy.
"Right now the world economy is a dynamic mix of the good and bad. The US, China and India are booming and at risk of overheating. Japan, the world's second biggest economy, is returning to life. Eastern Europe is growing, but the old EU, Germany, France and Italy in particular are crawling along.
"Now the UK seems to be following in its European neighbours' footsteps", Mike continues. "Recent reports suggest the economy is on course for its weakest performance in 13 years, with rising oil and raw material prices blamed for a third quarter decline in industrial production. Weak consumer spending is also being linked to a large drop in manufacturing orders.
"However, although the retail sector has suffered, the public and commercial sectors continue to do well. Non-residential, industrial, commercial and construction output, which includes factories, offices, schools, hospitals, retail outlets and leisure buildings grew almost 10% in value terms in 2004 compared with 2003, is still growing and further growth is forecast to 2007. There may be less confidence in the private non-residential sector as corporate weakness leads to postponing maintenance programmes to factories and offices, but growth in Government spending on improving schools and hospiptals will boost the public non-residential sector. All good news for the timber fire door market as companies and institutions increasingly look to improve the safety of buildings backed by fire safety legislation."
Richard Lambert, Director of the British Woodworking Federation, comments "It's all too easy to talk yourself into a recession, so lets not get carried away as the best market for timber products in a generation starts to ease off.
"We're still seeing more manufacturers reporting sales increasing rather than declining, quarter on quarter and year on year; but while relatively few reported a fall, there is a considerable increase in the number reporting no change. This trend is amplified looking to the future, where the majority of those interviewed expected no change in sales between the third and fourth quarter of this year, or between the fourth quarter of 2004 and 2005. We can also see a reduction in the balance of those reporting increased orders and the general sense of optimism.
"The fire door market has grown dramatically in recent years - we're anticipating the third year of growth of between 13 and 15%", continues Richard. "We may not see growth continue on that scale, but there is every reason to be optimistic about the timber fire door market into the future, if the Government can get its spending commitments into place, and our first impressions of the proposals to revise Approved Document B, which covers the Building Regulations on fire safety, are correct in suggesting that there will be an increased requirement for fire doors in housing.
"This quarter's survey reflects the Construction Products Association's prediction that the overall construction market would tighten considerably over 2005 and 2006, but wouldn't actually slip into decline. On that basis, perhaps we can take heart that it also predicts a sharp improvement in 2007."
The findings from the latest timber fire doors survey, as highlighted in Richard Lambert's commentary, show that a net 21% of manufacturers sold more timber fire doors in the three months July to September compared with the previous three months (chart1). The survey assesses the timber fire door market in terms of the percentage of manufacturers experiencing a particular business trend (eg a sales rise) over those experiencing the opposite, expressed as a net balance.
Although this is a sharp reduction in the very strong growth reported in last quarter's survey (chart 1), it is still a good performance. Most manufacturers maintained their sales and few firms actually sold less than the previous quarter.
Year-on-year a net 13% of manufacturers sold more timber fire doors in July to September 2005 compared with July to September 2004. Again, as seen in chart 1, this is a notable cooling from the rate of growth in recent surveys but firms maintained the higher sales they had achieved.
Looking ahead, expectations for growth weakened significantly both quarter-on-quarter and year-on-year, as seen in chart 2. On balance, just 5% of manufacturers forecast growth in the three months October to December compared with the previous three months (chart 2). In the main (just under seven in ten) manufacturers expect sales to remain the same.
Similarly, a net 4% of manufacturers anticipate higher sales in the next wuarter compared with the same quarter last year (chat 2). Just over half of the manufacturers interviewed expect no change.
"The BWF continue to promote safety aspects and the correct certification needed to meet new building regulations concerning fire doors. as a result we have seen demand for timber fire door sets grow substantially.
"At present 50% of fire doors we sell are sold as fire door sets, over the next twelve months I estimate that this will grow to 80%."
Mr David Pummell, Director
Alpine Joinery Ltd., Romford
However, a net 17% of manufacturers are more positive now about the overall prospects for the timber fire door market than three months ago. This compares with 48% in last quarter's survey (chart 3).
"There is plenty of scope for fire door growth in both refubishment and new build markets and increased awareness among customers of what is required.
"In the refurbishment market, insurance companies demand fire doors replaced with ones that hold correct ratings, certification and accreditation before cover is issued. As a result more customers are purchasing complete fire door sets which include ironmongery that meets all the necessary criteria.
"We sell approximately 2,400 fire door sets per month, 20% of which are sold with hardware, and we expect this to increase 10% year-on-year."
Mr Brian Mason, Sales Manager
John Porter Ltd., Sunderland
A net 13% of manufacturers reported an increase in orders compared with three months ago. As chart 4 shows, this is a sharp drop on the number of manufacturers showing an increase in last quarter's survey.
Prices increased with a net 22% of manufacturers putting up prices compared with three months ago (chart 5). Few dropped their prices. Most kept them the same. But on balance, similar to last quarter's survey, just over one in two manufacturers reported higher costs (chart 5). Large manufacturers and firms in the North and South were most affected.
Overall, 54% of manufacturers are currently working at capacity, but 70% of manufacturers have the capcity to produce more timber fire doors (charts 6 and 7).
Lack of skilled staff (71%), margin squeeze (67%) and supplier price rises (50%) were the three main problems facing timber fire door manufacturers in July to September 2005. The number of mentions for lack of skilled staff rose sharply in last quarter's survey. It was also the single biggest problem affecting manufacturers in July to September (chart 8) - a good indicator of growth.
Eighty-seven per cent of timber fire doors sold this quarter through manufacturers were internal doors. Thirteen per cent were external doors.
|Timber fire doors sold in last 12 months||Merchants' % of fire doors sales||Manufacturers' % of fire doors sales|
|By type of Fire Door:|
|Die formed doors||5%||0%||6%||0%|
|Laminated timber cored flush doors||5%||5%||10%||0%|
|All Timber Fire Doors||77%||23%||87%||13%|
Thirth-three per cent of timber fire doors sold in the last 12 months were sold as fire door sets. Most manufacturers (83%) sell fire door frames and just over two thirds supply additional components ie fittings for fire doors. It is reassuring to see that most manufacturers also advise customers which components are required for timber fire doors.
Merchant SalesA net 15% of merchants sold more timber fire doors in the last three months (July-September) compared with the previous three months (April-June). Sixty per cent of those reporting a rise in sales saw increases of 10% or more. A balance of three in ten merchants also sold more timber fire doors in the last three months compared with the same period in 2004.
A balance of 9% of merchants expect to sell more timber fire doors in the final quarter (October-December) compared with the previous three months. Confidence levels are also high with a net 27% of merchants more optimistic now about the overall prospects for the timber fire door market than three months ago.
The Timber Fire Doors Report, a quarterly trends survey, is produced by Michael Rigby Associates, and sponsored by the BWF-CERTIFIRE Fire Door and Doorset Scheme in conjunction with Timber Trades Journal. The aim is to keep a finger on the timber fire doors' market pulse, and to view manufacturers' and merchants' expectations of market movements.|
The survey covers a representative sample of timber fire door manufacturers as well as 100 timber and builders merchants. Telephone interviews took place between the 3rd-17th October 2005 across a balanced spread of size of firm and geographical area. Numbers employed was used as an indication of company size.
For survey details call Lucia Di Stazio on 01453 521621.
© Copyright BWF and Michael Rigby Associates 2005
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