
The Non Domestic Repair, Maintenance and
Improvement (RMI) market is a mature market and as such
performance tends to mirror that of the overall economy. The
market therefore exhibited good growth through much of the decade,
before declining in 2009 as the UK went through a recession. In
2010, the market for non domestic RMI products was estimated to be
worth £2.26 billion. The RMI market has outperformed new build
construction with growth continuing through 2008 and a relatively
low level decline in 2010 as end users continue to carry out
essential works and some low level improvements. The market was
further supported by expenditure in the public sector through 2008
and into 2009. However, this positive influence will decline as
public sector expenditure is revised down.
Factors influencing the RMI market in recent
years include underlying development and investment in end use
sectors, a backlog of maintenance needing urgent attention in the
public sector and increasing prices of construction materials,
adding value to the market. Legislation regarding health and
safety and increased energy and resource efficiency has benefited
the market in recent years, with upgrading of systems and
increased maintenance requirements, although this has slowed
somewhat as poor trading conditions are forcing direct replacement
rather than improvements where possible.
The supply chain for RMI products is complex and
fragmented due to the wide variety of products available and
differing methods of delivery. As more RMI work is being
outsourced, contractors are becoming an increasingly important
channel of distribution for products, with general building
contractors, HVAC and M&E contractors and also FM providers of
growing importance in the supply chain.
Lighting is the largest single product category
within non domestic RMI, with other electrical products, heating,
ventilation, air conditioning, hardware, tools and ironmongery
also significant sectors.
Commercial offices were the largest end users of
RMI products in 2010 driven by a need to maintain facilities to a
high level in order to project a good image, with education and
healthcare also supporting the market with programmes such as the
Primary Capital Programme and improvements to GP surgeries and
community clinics aiding this.
The maturity of the non domestic RMI products
market is likely to limit growth potential, with the market
remaining reliant on growth of the economy and expansion of
organisations to add value. Levels of new build construction
output have a strong impact in the market, with RMI contracts
often set up on the uptake of new business premises and
increasingly linked to full or bundled FM services. London is
leading the recovery in the office market and while vacant space
in the capital is now reducing, difficulties in raising finance
are constraining the commencement of speculative development.
Bearing in mind the long lead times for major office developments,
construction output is forecast to improve only in the medium to
longer term.
From 2011 the market
is expected to return to marginal growth, increasing to average
growth levels of 3-5% from 2012, with a resultant market of £2.7
billion forecast for 2015.