Since 2012, demand for roof coverings has been supported by the growth of housebuilding and domestic RMI, along with increased output in a number of commercial and industrial new build & refurbishment markets. However, tendering for commercial and housebuilding roofing projects has remained highly competitive under challenging market conditions, with many firms putting in low bids to secure work. Since 2015, an acceleration in the shortage of skilled roofers has resulted in demand for higher wages has also contributed towards an overall reduction in margins.
Overall market trends are largely determined by levels of demand for concrete roof tiles and metal panel systems, which accounted for around half of total sales between them in 2016. While concrete tiles are used on commercial buildings, the main source of increasing demand has been volume housebuilding. Competing products include new clay tiles and, to a lesser degree, fibre cement and natural slates. Demand for roof tiles and slates is relatively lower within the commercial and industrial newbuild & major re-roofing and RMI sectors, with flat roofing and metal roofing systems being used more. Demand for these has grown since 2013, driven by increased levels of output in the industrial, mixed used (offices, leisure and retail), stand-alone office and education markets.
The distribution of roofing materials varies significantly between different product sectors. Builders’ merchants and roofing merchants are the key routes to market for suppliers of concrete and clay tiles while as the majority of roofing slates are imported, independent importers and distribution networks are the main channels in this sector. With flat roofing systems mainly used on commercial buildings, the main channels are roofing merchants and direct sales. Direct supply from the manufacturer is the main route to market for profiled metal roofing projects, which often require bespoke structures, requiring the contractor to work closely with the manufacturer.
There are several factors set to negatively impact the construction market, having a knock-on effect for the roofing market. Uncertainty following Brexit and the general election appears to be undermining confidence within the UK construction industry. Brexit also looks set to undermine the amount of overseas investment in the UK’s construction sector and reduce the number of skilled tradesmen from the EU which would force the cancellation and abandonment of many developments. That said there are a number of more positive factors as far as the roofing sector is concerned. In particular the roofing sector is driven by both the RMI and new build side and the RMI side is in turn driven by need or necessity as opposed to style or design. As such the market remains supported, even during difficult economic times, as if the roof needs to be repaired that cannot be easily delayed or postponed. A further positive factor is that the housebuilding market remains very positive in the sense that demand levels are high and the Government has indicated that it wants to support the affordable sector with various schemes. That should provide some stimulus to the roofing sector.
Bearing these conflicting factors in mind we forecast a stabilisation in demand for roofing products through to 2021, with more positive market growth at the latter part of the forecast period, reflecting some improvement in confidence and the economy, as the impact of the EU exit settles down.