Additional InformationIncluding facing bricks, rendered block and insulated render systems, we estimate that the total installed wall cladding area declined from over 50m sq m in 2007 to 37 m sq m within three years, before levelling out in 2010-12. The downturn in the housebuilding, industrial and commercial new work markets has impacted heavily on demand for most cladding products and materials, in particular the largest groups - facing bricks, rendered block, cast stone, metal panels and curtain wall. However, in the private housebuilding sector, there has been a marked shift away from flats construction back towards houses. This has fed through to an increase in demand for facing bricks and other materials used for cladding houses.
The marginal recovery in 2010 and 2011 has mainly been due to improvements in the private housebuilding and Central London office sectors, sustained demand from the public sector and growing demand from the waste management and energy construction markets. Over the medium term, we expect to see only marginal growth at best. The expected recovery in commercial office construction has not fully materialised, with fears about the Euro Zone crisis and other macro-economic and political issues undermining investor confidence, particularly in high-value ‘skyscraper’ projects in Central London. At the start of 2012, two of the largest projects have been put on hold. The beleaguered retail sector is not expected to show any recovery for a while yet, as exemplified by the marked lack of shopping mall projects in the 2012 development pipeline. Cuts to public sector capital investment will start to have more of an impact from 2012 compared to 2011, with demand for cladding on schools, university, MoD and healthcare newbuild markets expected to show significant decline.
Key opportunities could be in refurbishment, partly driven by the Green Deal and Energy Companies Obligations (ECO), due for implementation in October and December 2012 respectively. However, many leaders and organisations in the construction industry have expressed reservations about the proposals in their current form, and our forecasts indicate that the impact on the cladding market will be relatively slow to take off. Other potential market drivers could be increased demand for cladding products from the waste management, recycling and renewable energy sectors.
Clay, and to a much lesser extent concrete, facing bricks still constitute the largest product group, despite the impact of the downturn in housebuilding. The other main types of cladding used on private housebuilding developments are rendered blockwork and artificial stone. Standard rendering and insulated render systems are used extensively on social housing newbuild and refurbishment and in areas exposed to higher than average rainfall and strong winds e.g. Scotland.
After brickwork, steel and aluminium profiled and composite wall panels comprise the second largest product group, the key areas of demand being; warehousing, out-of-town retail ‘sheds’, waste management and utilities facilities and industrial units. The impact of the recession on the retail and industrial sectors has fed through to reduced demand for metal cladding.
With so many different types of cladding products on the market, the supply base is highly fragmented, although there is a high degree of market concentration in some sectors.
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