In the absence of a large domestic wood floor manufacturing sector, the UK is a large consumer of imported wood flooring. UK consumption trends in 2014 have been more positive than in other parts of Europe, driven by strong activity in the construction sector and rising consumer confidence.
The latest Construction Trade Survey undertaken by the UK Construction Production Association (CPA) reports that construction activity increased again in the third quarter of 2014, the sixth consecutive rise in activity.
Although private housing output slowed, this was offset by growth in all other sectors. Construction firms also reported increases in forward looking indicators such as orders and enquiries suggesting that activity will continue to rise throughout 2015.
Drawing on the results of regular surveys and analysis of longer term demand trends the CPA forecasts that the UK construction sector will grow 4.8% in 2014 and 5.3% in 2015. Sectors particularly relevant to the flooring industry are expected to perform very well. Private housing starts are expected to grow 18% in 2014 and 10% in 2015.
The private housing sector’s rapid growth since early 2013 has been sustained by consistent levels of demand, the general UK economy’s return to health and government policies. For example, the UK government’s “Help to Buy” scheme allows private buyers to secure a mortgage with just a 5% deposit.
The private commercial sector, the largest component of UK construction, is set to increase 3.7% in 2014 and 6.1% in 2015. This sector is expected to benefit from a pickup in consumer spending and business investment and drive growth in each year up to 2018.
The CPA expects new offices construction will expa nd by 10% in 2014 and 8% in 2015, followed by 7% in 2016. The retail sector remains exposed to the long - term trend away from the high street to internet shopping, and previous peak output levels are unlikely before 2018.
Nevertheless, new large developments should still support growth in the retail sector of 8% from 2015. Austerity in the previous three years has meant that public sector construction has severely hindered overall construction recovery.
However the low point of public sector investment in construction seems to have passed. Increased funding for schools and hospitals is expected to lead to public sector construction growth averaging 2.6% per year between 2015 and 2018.
Growth in UK flooring demand slower than other economic sectors
A new report by Verdict, an independent market research company, also highlights that prospects are improving in the UK floor coverings market. Verdict notes that UK consumers are more confident about their finances, housing transactions are growing quickly and pent-up demand is being released.
However, Verdict also caution that the rate of growth in the flooring sector will likely be much slower than in other areas of the UK economy. Verdict predict that the UK floor coverings market will increase by just 1.7% as homeowners prioritise other sectors due to floor coverings' more hardwearing nature.
Verdict forecast that from 2014 to 2019, total demand for floor coverings in the UK will grow by 15.1%. Verdict suggest that a large share of this growth in demand will be in kitchen floors and will involve a wide mix of materials. This is partly because more homeowners will want to develop a room which they had deferred during the downturn.
It is also because of life-style changes in the UK. The kitchen has become the hub of today’s home, the place where the family gathers and spends more time in each day. There is a move to “open plan living” in which different functional zones in the home are defined not by walls but by different surface materials including tiles, laminates, carpets and real wood flooring.
Another trend identified by Verdict in UK flooring and furnishing sales is a significant shift from traditional retail outlets to on-line retailers. However, rather than seeing this as a threat, forward-looking retailers are exploiting the trend.
According to Gillian Drakeford, UK country manager of IKEA, the furniture giant now views online as a compliment to stores. “Customers are visiting the store and using the layouts to get ideas but perhaps going home and placing the order online. Going online is not killing the stores – it makes us more accessible, which grows the brand” she says.
IKEA’s sales figures suggest that the strategy is working. Overall UK sales of IKEA jumped by 11% to £1.4bn in the year to 31 August and footfall at IKEA stores is also increasing, rising by 5%. During the same period, IKEA UK's online sales increased by a quarter and now make up 10% of sales.
UK Flooring Show highlights challenge to wood
Signs of mounting confidence in the UK’s flooring sector were apparent at the 52nd edition of The Flooring Show, the UK’s longest - established and only national flooring event held in Harrogate from 21-23 September.
After a few years of marking time, largely due to overall economic conditions, this year’s show reported significant growth. Over 150 exhibiting brands were present covering some 3,500 square metres of exhibition space across four halls, up from 120 brands and 3,000 square metres respectively in 2013.
While the increase in numbers is encouraging for the flooring sector generally, the composition of exhibitors and show publicity highlighted the mounting challenge to wood from substitute materials. Wood products manufacturers and suppliers were in a minority at the show wh ile there was a very strong showing from manufacturers of carpets and tiles.
A large proportion of wood-based flooring on display consisted of laminated products. Exhibitors were showing a wide range of new laminate flooring designs “inspired by natural w ood”, with a strong focus on oak, worn wood and distressed patterns.
The range of new flooring products based on reconstituted wood-fibre also continues to expand. UK-based Interfloor was exhibiting the Nadura range, manufactured by Meister in Germany, which it claimed is a “completely new category of flooring made using wood powder technology”.
The range replicates slate, sandstone, metallic and wood effects and is designed to be hard wearing, with a lifetime residential warranty, slip resistant and ea sy to clean.
Suppliers of real wood flooring were represented at the show by Mohawk, a global player that offers hardwood flooring alongside a wide variety of other floor types, and BGP Trading, a leading Italian company in the wooden flooring market. BGP were exhibiting their top luxury “100% Made in Italy” collection of engineered hardwood flooring products.
There was a strong focus on oak in this collection, although the company can also supply high end engineered products faced with tropical specie s including teak, doussie and iroko.