IKO PLC comment: Q4 2017
Andy Williamson, Group Managing Director IKO Plc is BMBI’s Expert for Roofing Products.
It’s been a mixed picture for roofing in quarter four. Poor weather and storms at the end of 2017 damaged roofs, creating RMI work for roofers. Nevertheless, it’s difficult to get a clear picture overall of RMI trends. Political uncertainty and Brexit negotiations have sapped confidence and indecision is holding markets back.
Like other manufacturers, we’ve become ambassadors for innovation. We’re sold on the benefits of innovation to end users, contractors, specifiers and merchants. But innovation also changes markets, and there are downsides to change.
Innovations add value by improving product performance and extending product lifetimes, so customers enjoy more years of trouble-free performance. Higher performing roofing felts mean longer lifetimes which carry better product guarantees, rising to 15 years in some cases. That’s a big benefit to customers, but longer lasting products get replaced less often, which reduces the demand and the market for suppliers.
December mortgage approvals were the lowest recorded for three years, but housebuilding continues to grow and should rekindle activity in RMI. Merchants’ sales remain positive, but they may become constrained by wage inflation.
In contrast to RMI, poor weather through the winter months was bad news for specification work with many projects on hold because bad weather prevented work on the roof. Longer lasting products with longer guarantees are also impacting on specification work. Some hot melt products now come with 40 year guarantees.
Cost inflation will push more price increases in Quarter 1, and we have yet to see the effects of Carillion’s demise on roofing contractors.
New Safe2Torch regulations will drive better safety in flat roofing applications. The correct choice of roofing material for a particular type of roof is one of the biggest issues in roofing – and the larger the project the more important the right choice becomes. So, single ply, mastic asphalt, hot melt or liquids, specifiers and contractors need more dialogue with suppliers who can advise on what is best in the circumstances.
To summarise, private housing and the promise of large infrastructure projects continue to drive construction. We hope we start to see the promise of this specification work materialise!