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In the two
years under review since our last report, the UK prefabricated buildings
market has experienced a period of significant expansion with the total
market in 2003 estimated at £512 million at manufacturers selling
prices, which represents growth of around 9% compared with the previous
year.
During the
period 1996-2003, the market experienced annual growth of around 1-8%,
reflecting varying levels of activity in construction sectors - for
example, the positive impact of millennium and Government health and
education funding, and the adverse effects of the global
recession/decline in IT and telecoms 2001-2002. The years 2002-3
witnessed a continuation of these trends, but in overall terms the
prefabricated sector exhibited significant growth driven by positive
conditions in many end-use sectors, for example higher levels of
Government expenditure on health, education, and security protection and
detection.
More
recently, during 2003/early 2004, activity levels in commercial
construction have remained low but in overall terms the construction
market has been stimulated by substantial increases in health, education,
defence and infrastructure funding, also an increasing awareness of the
need to alleviate the housing shortage highlighted in the Barker Report,
by, amongst other measures, 'freeing up the housing market'. This may
result in higher levels of housebuilding starts in the long term,
depending upon the level of implementation by the Government of Barker's
recommendations. The key issue of overall acceptability levels of
prefabrication by home owners in the relation to traditional build also
remains to be resolved.
As a general
comment, market penetration of the various levels of prefabrication in
concrete steel and timber have been facilitated by regulatory and
innovative influences, particularly in the steel frame sector where the
continuing underlying technology support and product development of Corus
has played a significant role in propelling the metal sector into greater
prominence.
Innovative
influences are also motivating timber frame and concrete, with the mass
production of timber house components, and the concrete specialists
broadening the scope of precasting and cladding options including high
level prefinishing for robust cellular custodial applications.
Developments in highly productive cladding products have also assisted
market penetration - for example, Baggeridge's Corium and Kingspan's
Kingframe.
From
2004-2007, the overall market is forecast to continue to grow at a rate
of around 10-11% per annum, reflecting growth in a range of end use
sectors, increasing levels of government expenditure, and expansion in
concrete, steel frame and pods including volume production for
accommodation blocks and prisons. Growing penetration in the
housebuilding sector may also provide some additional motivation in the
medium term and represents a major area of opportunity for prefabrication
and off-site manufacturing in general. Furthermore, market penetration
continues to be facilitated by PFI and PPP, which is underpinning capital
expenditure in the public sector.
The market
has been segmented by type of building, and by type of end user. The term
'volumetric' refers to off-site completed units, pods or modules, whilst
we have used the term 'semi-finished' to refer to partially assembled
units, pods or modules requiring a greater degree of assembly on site.
Both 'volumetric' and 'semi-finished' include pre-cast concrete, steel
frame and timber. The majority of prefabricated buildings, including
steel cabins, accommodation and storage units, are of the volumetric
type, with a market share of around 65% by value, whilst semi-finished
have a share of around 35%. Timber frame housing and traditional methods
of construction, lie outside the scope of this report which focuses
exclusively on prefabricated volumetric and semi-finished units. However,
timber frame housing is comprehensively reviewed in AMA's new report on
the 'UK Timber Frame Housing Market - UK 2004-2007'.
The market
for prefabricated buildings has also been segmented by end user. End user
sectors comprise commercial and industrial, hotels, educational,
residential, healthcare, hire, defence, and the infrastructure including
asylum centres, immigrant detention centres and prisons and community
facilities, etc. Forecasts indicate varying levels of growth in these
sectors dependent on end-user market growth and the likelihood of share
gain from traditional building where the scarcity of skilled personnel
will be accentuated by recent increases in government funding, notably
sectors such as social housing, health, education, infrastructure,
prisons, asylum accommodation centres and immigration detention centres.
Product innovation also influences sector growth prospects with Corus'
blast resistant structure representing a significant technical advance
with potentially a wide application.
Several niche
growth sectors have been identified. These include the growth of the
security sector, (for example explosion resistant buildings), modular
accommodation, private houses, self-contained cabins, and 'welfare'
units, power units, etc. It is likely that volumetric and semi-finished
production will increasingly penetrate the private housing market as a
result of prefabrication developments including a wider choice and
selection of prefabricated houses, also the impact of substantial
production resources emanating from Framing Solutions, Space 4, etc.
Meanwhile,
levels of productivity are improving in the masonry sector with the
application of production engineering techniques, standardisation, and
fabrication of components and subassemblies as part of the move to
prefabrication by housebuilders and suppliers generally.
The
prefabricated building industry is becoming increasingly fragmented as a
wide range of companies are attracted to the growth prospects of
prefabricated structures.. Our estimates for 2003 indicate that the
overall market leader is the Shepherd Building Group, which has four
subsidiaries Portakabin, Portasilo, Yorkon, and Foreman with a collective
share of around 20%. Elliott Group are estimated to account for a 15%
share followed by Atlas Ward, Cosalt and GB Industries each with a 6-9%
share. GB Industries (formerly Horncastle Industries) includes Britspace,
Gateway Fabrications and Ultra Secure Products. It is estimated that
shares of around 2-5% are held by CV Buchan, Compton, RB Farquhar,
Rollalong, Terrapin, Thurston, Tingdene, Premier Transline, Precast
Cellular Structures, Stackright Building Systems, Wernick, Caledonian Building Systems, all
significant players. Others also include Kingspan Metl-Con, SGB Rovacabin,
Volumetric, McAvoy Group, Bell and Webster, Bison, etc.
In addition,
Westbury have a substantial in house prefabrication - Space 4, whilst
Unite operate an in-house prefabricated facility including mass-produced
pods for student accommodation blocks.
As previously
indicated, our estimates of market shares refer to 2003. Since
substantial growth of around 10-11% has occurred in the overall market
2003-2004, it is likely that forecasts for 2004 will reflect varying
levels of growth in material sectors and the impact of several new
growing entrants. This will tend to result in some share changes.
List
of Companies Mentioned
Shepherd Building Group, Portakabin, Portasilo, Elliott
Group, Horncastle Industries, Britspace, Gateway Fabrications, Ultra
Secure Products, SGB Rovacabin, Bison Structures, Pre Cast Cellular
Structures, Stackright Building Systems, Bell and Webster, Compton Buildings, Volumetric, RB Farquhar, Elliott Hire, Rollalong, Premier
Transline Hire, Caledonian Safemaker, Cox Accommodation, Hewden Stuart, Unite Group, Terrapin, Conport., Premier Group, Horncastle
Industries plc, Tingdene Homes, Bell and Webster, Atlas Ward, Ultra Secure
Products, Cosalt Holiday Homes Ltd, Volumetric Ltd, Potton Group, Butler
Europe, S Wernick & Sons, Pinelog Ltd, Glasdon Group Ltd, Handon
Building Materials Europe, Tilden Group of Companies, Bell and Webster
Concrete, Churchtown Buildings, Bailey & Davidson, Pyramid Building
Systems, The Unite Group, Bullock & Driffill, Balmoral Modular
Building Systems, Caledonian Building Systems, David Webster Group, Clarks
Portable Accommodation, Thomas Mitchell Homes, Sturdy Concrete Garages
& Industrial Buildings, Sutcliffes, Blue Box Modular Buildings, Frank
H Dale, Nethan Valley Homes.
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