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Editor’s Blog Picking up steam can be a dream

Returning to a sector, after some months away, can always be instructive. Taking one or two steps back should make you see developments more dispassionately – the press releases can be looked at without having to correct and redact the superlatives.

There is more time to look at the ‘bigger picture’ and after this dreadful period, indications are there that a general improvement is setting in. The National House Building Council (NHBC) has reported that new build in this sector is at the level of 2007, prior to the great crash. New home registrations in the UK increased by 28% in 2013 to 133,670 and in London, 26,230 new build homes were registered, on the face of it, an impressive 60% rise compared with the same period last year. Except for Wales, surges in registrations have been recorded all over the UK which should make us feel the good times are here again.

But are they yet? Many of the figures we have seen still show that activity is below the 2007 levels. If we analyse the many big schemes being started, we can detect that there is a lopsided approach to housing. The Battersea Power Station development is one example. Of the 3,500 housing units promised, only 500 of them will be affordable; most of them have already been sold to overseas buyers who may only be in London for short periods.

Does that matter to hard pressed window and door fabricators and installers? Many would say that you go where the business is but the trouble with the current state of affairs is that the growth we see now is largely speculative and we know where that can lead. The same report by the NHBC warns that there is already the danger of overheating and a failure to meet burgeoning demand.

 

One Prime Minister was rash enough to brag that there would be “no more boom and bust” and then presided over the worst recession in living memory because he allowed things to let rip. Gordon Brown wasn’t the only one guilty of this. The recession of the late 1970s and early 1980s was only papered over by a credit boom by the then Chancellor, Nigel Lawson. Rather like his daughter’s soufflés, there was a bad sagging at the end of the decade.

While there have been encouraging sets of figures, other surveys would urge a degree of caution before breaking open the bubbly. For example, the Construction Products Association (CPA) noted the slight fall in construction output of 0.3% in the last quarter of 2013. “This GDP estimate shows that the construction industry’s recovery is still in early days,” warned Noble Francis economics director, CPA.  “Of the four main sectors, construction output was the only one to register a negative result.”

 

Of course, the argument could be that this is either a blip in the generally good growth in Gross Domestic Product (GDP) or a time lag. The CPA feels it is probably a case of construction catching up. “This was a marginal fall in the preliminary figures within a general upward trend, and our latest forecasts anticipate a 3.4% rise in construction output for 2014,” said Mr Francis.

 

So, a mixed picture and this is without dealing with the dire performance of the government’s Green Deal, roundly criticised by trade associations like the Federation of Master Builders (FMB) and the Glass and Glazing Federation (GGF). No matter what spin government ministers and their mandarins in the Department of Energy and Climate Change (DECC) put on it, the take up of the Green Deal has been pathetic. To date, of the 129,842 Green Deal Assessments that have occurred since the scheme’s launch a year ago, to December 2013, only one window installation has taken place so far, using Green Deal finance.

 

Is it any wonder that after all the work put in to have a structure in place for this much trumpeted scheme, there is exasperation all round? “The Green Deal has failed to enthuse home owners and has had no significant impact on the industry,” stated Giles Willson, GGF deputy chief executive and director of Technical Affairs. “The latest government statistics clearly show a very poor uptake and this is mainly because the scheme is overly complicated, unattractive and has not been promoted to homeowners effectively. To have such a low quantity of window installations under both the Green Deal and the Energy Company Obligation (ECO), sharply underlines why the scheme is simply not working for the replacement window industry and changes have to be made.”

 

Perhaps it was being out the loop for so long, but last week I naively asked the DECC to provide figures for the non-residential part of the Green Deal. The response from a spokesperson, said it all. ‘Focus to date has rightly been on the domestic sector and while individual businesses will decide how they should operate, the government is working hard with the supply chain to support them in ensuring they are market ready to deliver non-domestic Green Deal.’ You will not be surprised to know that the spokesperson went on to state no figures were available for the non-domestic sector.

 

But what of the public sector? The DECC spokesperson told the good news: ‘The government announced on 2 December 2013 that, over three years, £90 million will be spent improving the energy efficiency of schools, hospitals and other public sector buildings.’

 

Figures were never a strong point with me but that comes to a massive [sic] £20 million a year. It’s hardly a drop in the ocean, or put another way, a drop in the inland sea that is now Somerset.

 

Michael Gannon

Editor

MyTradeTV

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