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Press Release: UK External Wall Cladding Market Development Report

Released: September 2010

After researching the UK external wall cladding market development and taking into account various other factors the following conclusions can be drawn from MBD's report:

Market Review 2006-2010:

The UK market for external wall cladding in volume terms is believed to have contracted in each year between 2008 and 2009, including a significant 19% decline in 2009. This is projected to be followed by a more moderate decline of 2% in 2010, taking demand to 28.12 million m2. This is in contrast to growth of 5% and 7% recorded in 2006 and 2007. The decline during the second half of the review period is largely due to the financial and economic crisis, resulting in a significant downturn in new construction activity. Although the UK has officially moved out of recession at the end of 2009, the economic recovery is likely to remain fragile for the foreseeable future, exerting a downward pressure on construction output and on demand for external wall cladding.

In value terms, the market for external wall cladding is projected to decline by 3% in nominal terms in 2010, taking sales to £1280.2 million. This consolidates a stronger decline of 17% recorded in the previous year. In the early part of the review period, value sales of external wall cladding increased, at 5% and 6% in 2006 and 2007 respectively. Overall, the value of the external wall cladding market is projected to decline by a cumulative 14% between 2006 and 2010. During the latter part of the review period, demand was negatively affected by reduced construction output, in particular in the offices, industrial, warehouses, and apartments sectors. Some demand was sustained in the public non-residential sector, as the Labour Government increased investment in public build projects, in a bid to kickstart the economy.

Market Forecast 2011-2015:

In volume terms, sales of external wall cladding are expected to return to growth in 2011, albeit at a moderate 1%, as construction output is anticipated to remain subdued. Furthermore, any increase will be from a low base as, in light of the decline in demand recorded in the previous three years. The UK market for external wall cladding is anticipated to continue to increase in the following four years, with annual growth levels anticipated to fluctuate between 2% and 4%. In 2015, demand is forecast to reach 32.2 million m2, representing an overall increase of 15% compared with the current year. Over the forecast period, demand is likely to be predominantly generated from the private construction sector, while demand from public sector construction is set to decline, reflecting public spending cuts.

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