MARKET REVIEW SUPPLEMENT FEATURE
YEAR IN REVIEW Electrical Safety First
Electrical Safety First believes that it can best protect the consumer by working with the industry and other key stakeholders and 2016 has proved the success of this approach. Electrical Safety First led the charge to ensure electrical safety was put on par with gas, by lobbying for regular electrical checks by registered and competent electricians. This requirement has now been included in the recent Housing Acts passed by the Devolved Governments in Scotland and Wales. The England-only Housing and Planning Act also included an amendment on electrical safety, which we led with members of the House of Lords. These are particularly important items of legislation, given that electricity causes around half of all domestic fires in Great Britain each year, creating billions of pounds worth of property damage and incalculable personal cost. Further support comes via our popular online tool, which allows consumers to search for a registered electrician in their area. Working with the FRS we helped establish a
requirement to BS7671 whereby metal, rather than material such as plastic, is used to support cables in escape routes - to help prevent their premature collapse in the event of a fire. Currently, we are working to extend the requirement to ensure that cables in all areas are adequately supported. We are also helping electrical installers through our Wiring Regulations Advisory Group (WRAG), which offers guidance on the wiring regulations. While BS7671 sets the standard for electrical installations in the UK, in real life they often need to be interpreted and the WRAG helps to provide interpretation and an industry view on common queries. Information on this popular resource can be found on:
www.electricalsafetyfirst.org.uk As a consumer safety charity our core
mission is to protect people from the dangers of electricity. So we ensure that all our consumer campaigns highlight the dangers of electricity and the need to use a registered electrician. But we have also created a number of campaigns focusing on the issues around recalled and counterfeit items – and how these impact on businesses throughout the electrical product supply chain. It was in response to industry feedback (via our popular Product Safety Conferences) that we decided to develop a consultancy service to help improve product safety and recall processes. We now offer a portfolio of services including risk assessment, product testing advice, guidance on electrical product sourcing and due diligence, as well as product safety training to all those involved, at every stage of the electrical product supply chain. It’s been a busy year, with more to come – and we are looking forward to 2017.
BSRIA says: post Brexit vote - HVAC & smart energy falls by £95 million
B
SRIA has released its
first snapshot of the UK HVAC and smart energy market landscape post Brexit.
The HVAC and
smart energy product market is estimated to be worth £4.5 billion in the UK per
annum. Market growth was expected to be a healthy 3.1 per cent for 2016 prior to the Brexit vote but BSRIA research with suppliers post Brexit now anticipates this will shrink to 1.1 per cent, knocking off £95 million compared with the pre-Brexit view.
AIR CONDITIONING & HEATING In the air conditioning market, growth has dropped from 12.8 per cent down to 5.5 per cent. Smaller splits have suffered due to a cool summer in the first half, plus issues with the distribution chain, higher than expected residual stocks and a weakening in the critical retail market. Brexit is already playing a part as any delays in investment decisions can impact these products very quickly. Project delays resulting from Brexit may have a
small effect in 2016 but will mainly impact the market between 2017 and 2019. However, floor space statistics suggest a big growth in completed projects in 2017 and this will mask any Brexit effect until 2018. Some completions may be delayed to 2017 as a result of Brexit, hence the reduction in our 2016 forecasts. The lowering of the pound will have a limited
effect as the air conditioning market is mainly imported. Packaged air conditioning is almost 100 per cent imported from Asia and European factories and there are only three chiller manufacturers in the UK. In contrast, over half of airside products are manufactured in the UK. Both fan coil and airside manufacturers will see a benefit in margins and there could be an increase in the limited export market to Middle East and Commonwealth. Andrew Giles, director of Worldwide Market
Intelligence, BSRIA, said: “Around 80 per cent of the £2.2 billion market is domestic boilers, water heaters and radiators. Renewable alternatives remain niche markets: heat pumps are falling with RHI having a limited impact. The main heating markets are saturated and over 90 per cent of sales for replacement and extensions/refurbishment. “With the death of the Green deal and other schemes BSRIA had expected a flat market for heating but now expect a small proportion of consumers to delay going ahead with refurbishment because of the general
uncertainty surrounding Brexit resulting in a drop of 1.2 per cent in the market. “The UK has the biggest boiler market in the
world, with nearly 1.7 million boilers sold a year and this is expected to be the case until 2020. There are no longer any British owned boiler manufacturer companies in the UK: the boiler market is entirely controlled by EU-owned companies, with their headquarters elsewhere in the EU. The EU boiler manufacturers are well established in the UK market and three–quarters of sales are produced here. However, there are a significant number of companies importing, who will be suffering from the lower pound. Furthermore, some imported component costs may rise. The UK boiler market is sold nearly entirely through wholesalers and is already one of the most price competitive markets in Europe. “Post-Brexit, subsequent trade deals between the UK and the EU could prove difficult once Article 50 is invoked. Because of likely increased red tape, importing boilers or components into the UK could be harder. In the short term, companies manufacturing in the UK will gain competitive advantage in the UK because of the lower pound. The long term remains unclear. As such: this is a risk for the UK economy. And especially so if EU boiler manufacturers decide to ease their presence in the huge but challenging UK market.”
SMART TECHNOLOGIES Commercial fire and security and building control products account for 68 per cent of the 1.6 billion smart technologies market. These products are more likely to be put in towards the end of commercial projects. In 2017 the continued pull through of
commercial projects nearing completion, which were started two years ago, will mask any further falls from Brexit, with almost no effect on fire as it is regulation driven. Building control products should follow a
similar pattern to central plant, but growth is lower as many sales are to public areas (health, education, central government). Giles added: “For domestic controls the main
markets are valves and actuators, thermostats and domestic controllers. This is a very large market ranging from simple thermostat and valves to very sophisticated smart home devices linking in with apps and other housing devices and services. It has a strong link with the heating market and is principally sold for refurbishment and replacement applications. “There will be a maximum effect on the
market in 2016 of two per cent lower growth, a large chunk of which of which can be attributed to Brexit. Looking further ahead: the uncertainty could start to affect the market adversely in 2017 – but will be partly offset by a high level of project completions so – it will not be until 2018 that suppliers see the full implications.”
PRODUCT OF THE YEAR | DECEMBER/JANUARY 2017 S5
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