Successful times for Stelrad despite challenging radiator market
Stelrad’s John Colling addressed the current state of the radiator market and the outlook for 2017 at a recent media gathering.
He said that against a backdrop of economic uncertainty, growth in the UK radiator marketplace has stalled somewhat as a result, primarily, of the economic climate following the Brexit vote to leave the single European marketplace,
Mr Colling said: “Whilst nobody really knows what the outcome of Brexit will be, no one likes uncertainty and that creeps insidiously into the way the business community reacts to major potential change such as this.
“Brexit seems likely to be very different to the Brexit we were sold by the politicians prior to the vote, but just what it will look like is still very unclear – apparently in the minds of those responsible for negotiating our way out of Europe, let along those of us who will be expected to pick up the pieces and ensure that a positive economy rises from the outcome – whatever it may be.”
- Some of the key facts that have adversely affected the radiator marketplace include:
- Social Housing spend has fallen significantly over the past two years
The Commercial radiator marketplace is in structural decline as alternative technologies gain ground
- Despite an improving trend, residential New Build remains at a historically low level – that despite the claims from Government that planning consents are at an all-time high – it’s one thing getting planning consent, quite another to get houses out of the ground
And on a more positive note, Private RMI business – the one off sector as we know it, which represents 60% of the market – has remained stable.
Forecasts for the next few years
Mr Colling’s forecast for the radiator marketplace in 2016 is that there will be a 2% volume reduction year on year but that recovery is expected, driven by an eventual residential new build upturn in the years ahead.
The total volume market for radiators, excluding cast iron, aluminium, convectors and storage heaters all of which see relatively small and diminishing volumes, is expected to be 7.19 million in 2016 (7.35 million in 2015), rising to 7.26 million in 2017, 7.32 million in 2018 and 7.38 million in 2019 according to BRG Building Solutions and BRG
Designer radiator volumes, however, are forecast to see an increase of 5% volume growth in the years to 2018, outperforming the radiator marketplace as a whole. This is a sector that Stelrad is embracing with its range of premium towel warmers, decorative steel tube models, its multi-columns and its premium panel radiators.
During 2016, Stelrad has seen a number of product range extensions, including the Softline Deco, Plan and Vertical range extensions, plus a new range of Vita vertical radiators.
“Despite the disappointing state of the market, we have made a decision to invest in building market share still further and to improve our representation in a number of niche marketplaces taking advantage of our manufacturing, logistics and marketing strengths,” continued John Colling.
“These are still exciting times at Stelrad and we are positioning ourselves to take advantage of the improving economic climate as things become clearer and more positive in the months ahead.”