As demand for wall cladding is largely dependent
on housing, commercial and industrial newbuild, the market has
declined severely since 2007. Including facing bricks, rendered
block and insulated render systems we estimate that total area
installed has fallen from around 50m sq m to under 40 m sq m in
just two years. Cladding types that have been particularly
affected include facing bricks, rendered block, cast stone
profiled metal panels and curtain wall. The severe downturn in
private housing newbuild has been a key factor in the sharp fall
in the volume of facing brick deliveries.
After facing bricks, the largest product group is
that of steel and aluminium wall panels – profiled and
composite. Mostly used on distribution warehousing, out-of-town
retail warehouse stores - like IKEA and B & Q - and industrial
buildings the decline in these sectors has had a marked impact
on demand.
One category of product that appears to have
endured the recession better than most is that of insulated
render systems, partly because demand is spread across a broader
range of end-use sectors than for most wall cladding types and
also because refurbishment works are a key area of use as well
as newbuild.
Since Q4 2009, there has been an increase in new
orders for private housebuilding with most leading housebuilders
recently having released land for renewed development. This
ought to feed through to an increase in demand for bricks, cast
stone panels and rendered blockwork although over the
medium-term production is unlikely to increase significantly due
to current, large stockpiles, particularly for clay facing
bricks.
As with previous recessions there is typically a
lag of 12-18 months, even as much as 2 years, between recovery
in private housebuilding and the recovery in commercial
construction. The general consensus across the industry is that
there will be a further decline in commercial construction
output in 2010, with sustained recovery unlikely to take place
until 2012.
Public sector building programmes – such as
Building Schools for the Future and MOD estate re-development
projects – should provide some opportunities for suppliers of
certain types of cladding – e.g. insulated render systems,
rendered blockwork, low-rise curtain wall, timber and cast stone
– until the next Comprehensive Spending Review in 2011, but
thereafter there will be cuts in schools,
defence and healthcare capital budgets as there has recently
been with universities.
