Construction and living

Jan Hudak

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After expanding his international experience (in USA, Sweden and Slovakia) from studies and short traineeships & internships in insurance at Allianz and public sphere at Ministry of Economy, Jan joined Interconnection Consulting as the Market Analyst responsible for various industries. Among them are boats, parquets & flooring, finance, healthcare & pharma, FM and some of the special technical & construction industries. During his work at Interconnection, he was invited to present some of the findings and data at the conferences or EXPOS. In addition, he creates data solutions for B2B & B2C segment. Also, in Interconnection he is in charge of internship programme in Bratislava as mentor as well as providing assistance to other colleagues and recently he became a consultant for untypical projects and business development.

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Tel:+43 1 375 00 15 12

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Strong Price Rise Leads to High Sales Growth in the Flooring Market

The global flooring market will more than make up for last year’s decline of around 6% with an increase in turnover of over 15% this year. However, the increased demand was met with supply bottlenecks at the same time, which on the one hand drove up prices, but on the other hand only marginally increased sales (+4.2%), as a new study by Interconnection Consulting shows.

Although the forecast for 2021 is very positive, optimism could be severely curbed by supply bottlenecks for raw materials, the study notes. The US is the leading market with a turnover of 27.4 billion euros followed by China 20.4 and India 19.4 billion euros. India, however, leads the way in terms of sales, with a global share of 36.4%, ahead of China 30.8% and the US 12.7%. Due to the sensitive price increases, the annual sales growth rates until 2024 will also increase more than the sales growth forecasts. For example, an annual increase in turnover of 10.6% is expected for the USA until 2024. The forecast for India is even higher, with an increase in turnover of 13.1% per year. However, sales will increase by only 1.7% per year in the US and 7.3% per year in India over the same period.

 

Home Office Renovations in Strong Demand

In 2020, the new construction sector was particularly affected by the decline. Sales in this segment fell by 15.6% globally, while the renovation sector declined by only 5.4%. “The boom in optimizing one’s own four walls stemmed not least from the fact that one’s own home has become not only a living space but also a working space since the pandemic,” explains Ivan Pjatko, author of the study. The ratio of residential to non-residential construction is around 60 to 40, with residential construction showing an even stronger dynamic for the next few years, with higher growth potential.

 

Trend Towards Natural Materials on the Rise

Ceramic tiles are the most popular floor covering worldwide with a sales share of 42.5%, followed by resilient floor coverings (16.0%) and laminate (14.6%). Laminate (+7.6%) will achieve the greatest sales growth across all product groups this year. The gap in turnover is narrower. Ceramic tiles account for about 20% of turnover, followed closely by wood/parquet flooring with a share of 17.1%. Only then do resilient floor coverings follow. There are also differences in the individual regions. In India, ceramic tiles account for the lion’s share with 56.7%. In the Middle East there is a growing trend towards wood/parquet flooring. The trend for eco-materials will continue to gain momentum, especially in Western Europe, the study shows. The most important global players are Amtico, Beaulieu, Gerfloor, Hamberger Flooring, Forbo, Interface, Junckers Kaerhs, Kronospan, Mohawk, Parador, Shaw Floors, Tarkett, The Dixie Group.

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Renovation Boom and Price Increases Set Sales Records for Floor Coverings

After a damper in 2020, the European market for floor coverings has again recorded high growth figures. Sales will rise from €25.8 billion to €29.2 billion in 2021 in the countries surveyed, which is a growth of 12.7%. By 2024, turnover is expected to rise to 34.5 billion euros, according to a study by Interconnection Consulting.

The reason for the increase in the turnover of floor coverings is less down to an increase in sales than to the fact that the prices of raw materials are being driven up due to supply bottlenecks. Turnover will accordingly rise much faster than sales in the next few years due to price increases and demand. In Germany, annual turnover growth will be over 6% until 2024, while sales is set tob e only 1.9% per year. In Italy, the ratio of turnover to sales growth is 6.1% to -0.1% annually. In terms of turnover, Germany is also the largest market in Europe with a share of 26.2% followed by France with 12.2% and the UK 10.9%. In terms of sales, Germany leads the ranking in Europe ahead of Russia and Turkey.

Renovation As Growth Engine

In 2020, it was mainly the new construction sector that was affected by the decline. Sales in this segment fell by 23.4% across Europe, while the renovation sector even grew by 6.4%. “Many people spent their time at home and therefore also used the time to renovate their four walls,” says Ivan Pjatko, the author of the study. In Austria, there is a trend towards natural raw materials such as wood, especially oak. Similar developments can be seen in Germany, where real wood is the trend. In France, the government is promoting ecological solutions in the installation of floor coverings with a new regulation RE2020. The trend for eco-materials will continue to gain momentum, especially in Western Europe, as the study shows.

Ceramic Tiles Still in the Lead

Ceramic tiles are the most popular floor covering throughout Europe with a sales share of 27%, followed by laminate with 23%, resilient floor coverings with 12% and textile floor coverings with 12%. The picture is not much different in terms of turnover. The share of ceramic tiles is around 23%, closely followed by resilient flooring (18%) and textile flooring with 17%, already followed by parquet/wood flooring with 13% but very good growth prospects. The most important European players are: Altro, Amorim, Beauflor, Forbo, Gerflor, Nora (Interface), Tarkett, Kaehrs, Windoeller.

The study examined the countries: UK, Spain, France, Italy, Belgium, Netherlands, Germany, Switzerland, Austria, Poland, Czech Republic, Slovakia, Hungary, Romania, Turkey, Russia.

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Eastern European Market for Insulation Materials Loses a Little Momentum

The Eastern European insulation market will grow by 3.7% in volume this year. After a pandemic-related decline in 2020, sales will increase by over 6% on average annually until 2024, according to a study by Interconnection Consulting.

Poland is Growth Master

Drivers for the insulation market in recent years have been mainly legislative initiatives at a European level, which stimulated technological progress and the development of new materials for thermal insulation. However, the development paths in the five countries studied differ. In the Czech Republic, sales in the sector will continue to decline this year. The new construction sector, which accounts for about 70% of the industry’s order volume there, was hit particularly hard by the pandemic. Many new construction projects were cancelled. Thus, the decline will continue at an accelerated pace this year (-8.1%). In Slovakia, the situation is different. There, the rebound is expected as early as 2021. Above all, the government’s subsidy measures in the area of thermal insulation are responsible for the growth. Poland was the least affected by the crisis and the insulation market actually grew in 2020. The renovation segment in residential construction grew strongly, but the new construction segment also remained robust during the crisis. Things are different in Turkey, where the new construction segment was hit very hard by the pandemic. Russia’s economy, on the other hand, which had already been very fragile since the 2016 economic crisis, became even more unstable due to the pandemic. The market fell by 6.7% in volume in 2020. This year, the market is expected to rise again by 3.8%.

Residential and New Construction are the Drivers

The largest sales segments are residential construction with a share of 70.6% on the one hand and new construction with a share of 69.1% on the other. The most important building segments are facades with 49.6%. Mineral wool is the most important insulation material with a market share of 40.8%, followed by EPS (Styrofoam) with 36.2%. However, there is also a trend towards environmentally friendly materials such as wood, hemp, flax or cellulose. These materials show the strongest overall increase (+17%), but are still at a low starting level. Due to its property of heat resistance, mineral wool therefore remains the most important insulation material in terms of growth prospects. Not least because increasingly strict regulations govern fire protection in buildings.

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EU Support Measures Lead to Strong Price Increase in Insulation Market

The insulation market is one of the key markets worldwide when it comes to climate protection. Therefore, the sector is also a high priority for the European Union. Due to stricter guidelines for the insulation of buildings, the market remains very dynamic. This year, the industry will achieve a 3.8% increase in volume in Western Europe. Between 2020 and 2024, the projected average growth will be 5.8% annually, according to a study by Interconnection Consulting.

The main drivers for the insulation market in recent years have been legislative initiatives at European and national level. In Italy, for example, the Superbonus 110% (building owners are reimbursed up to a certain amount of their expenses at 110%) has boosted the thermal insulation of buildings.  On the other hand, the market was hit hard by the lack of raw materials due to supply shortages during the pandemic. This also led to a sensitive price increase for insulation products. As a result, the industry’s sales volume will increase by 17.6% in 2021, while sales will only grow by just under 4%. Overall, however, the decline in the market at the height of the pandemic was weaker than in many other construction-dependent sectors. In the Benelux countries and France, many people began to renovate their own homes during the lockdown, which provided a growth spurt for the thermal insulation market. Despite the pandemic, Germany, the largest market for thermal insulation in the EU, also continued to implement its support programme for energy efficiency in the construction sector. Thus, in the first half of 2020, loans and subsidies were approved for a total of 215,000 residential units. This will lead to a surpass of the 2019 sales level this year.

Mineral Wool Dominates

In the coming years, the market shares of thermal insulation products with high heat resistance will increase. This development is driven by EU directives and by insurance companies that demand higher premiums for poorly insulated buildings. Mineral wool dominates the market in Western Europe with a market share in volume of 47.3%, ahead of polystyrene with 26.9%. The outlook for mineral wool is also excellent. “We expect mineral wool to increase its market share due to government regulations regarding fire safety,” says Katarina Gajdova, the author of the study.

Trends and Companies

An increase in the market share of environmentally friendly materials such as wood, hemp, flax or cellulose is expected in the next few years. With regard to increasing purchasing expectations in this segment, the company Knauf Insulation has announced that it will expand its sales for wood construction. However, wood is not at all the high flyer among the environmentally friendly materials. With a forecast +8.2%, cellulose is the material with the greatest growth predicted for 2021. The increase will average 8.4% per year until. Another trend concerns digitalisation in construction. Xella, for example, has developed a digital planning service that brings together various elements relevant to shell construction in order to shorten the shell construction time.

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Price Surge in the Sandwich Panel Market

The market for sandwich panels is experiencing a shortage in steel production as a result of the COVID crisis, which in turn leads to immense price increases. The market in the CEE countries Czech Republic, Slovakia and Poland is also affected by this. For 2021, Interconnection Consulting forecasts an increase in market volume in these countries of 32.1%, while sales volume will almost stagnate (+1.7%).

The experts are optimistic that the steel supply crisis will soon be over. A recovery in this regard is expected as early as 2022. The resulting drop in production costs will also lead to rising sales figures. In Poland, prices increased by almost 6% in the last quarter of 2020 alone. At the beginning of 2021, this trend continued at an exponential rate. Overall, Poland, like many other countries, showed a noticeable shortage of labour and reluctance to invest in new construction during the pandemic. This resulted in sandwich panel sales in 2020 falling back down to 2017 levels (-6.4%). By 2022, Interconnection expects a return to the level just before the crisis struck. The slump in the Czech Republic was not quite as severe in 2020, but while sales in Poland have rebounded strongly this year, the decline in the Czech Republic continues at an accelerated pace (-5.0%). The reason for the decline in sales is primarily the price increase for raw materials. The same applies to Slovakia, where sales have fallen by 4% this year.

Eco-Friendlier Materials Sought

Products with higher insulation and fire resistance, (e.g. mineral wool and thicker) are also on the rise due to EU regulations. There could also be a shift towards more ecological, such as halogen-free products, explains Katarina Gajdova, the author of the study. Overall, the study shows that steel dominates the market as a covering material with almost 98 percent. As a filling material, PUR/PIR (panels with synthetic insulation materials) dominate with about two-thirds of the market share. Mineral wool accounts for about one third. Important companies active in the CEE region are Balex Metal, Gor Stal, Kingspan and Ruuki.

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Price Increases Cause Turnover to Rise and Sales to Fall

The market for sandwich panels for thermal insulation of buildings was affected by high price increases during the pandemic, due to shortages in the steel sector. While the market volume in value terms will increase by 16% in Western Europe this year, sales will decline by 6% compared to last year, according to a study by Interconnection Consulting.

The pandemic saw a halt in the production and export of steel production, which mainly brought imports from China, the world’s largest steel producer, to a standstill and resulted in a shortage of the most important cladding material for sandwich panels. Experts expect the situation on the steel market to return to normal in 2022 and prices to move southwards again. The strongest price increases in 2020 were seen in Spain with +10% and France and Austria with +8% each. On a positive note however, the experts’ gloomiest forecasts, which expected prices to rise by 20 to 70%, were not fulfilled.

France Faces a Sharp Slump

While all the countries studied expect a positive turnover trend due to the enormous price increases, which will accelerate again in 2021, sales in all countries will drop sharply this year due to the shortage in the steel market and lower demand. In France, a slump of almost 11% is expected. In Spain, forecasts expect a decrease in sales of around 7%. Germany and Austria will lose about 5% of business. Italy will lose another 3% in sales this year after a 9% slump in 2020. “This is not helped by subsidy measures such as the Superbonus 110, which applies mainly to residential construction, where sandwich panels are not so popular,” explains Katarina Gajdova, the author of the study.

Mineral Wool Catches Up

Steel is the outstanding covering material for sandwich panels with a share of 93.5%. Aluminium is less popular among manufacturers and consumers due to its lower insulating power. When it comes to insulation material, the ecological orientation of products, such as halogen-free, is also becoming increasingly important, as Gajdova explains. Overall, synthetic insulation materials dominate the market with about 71%, but are losing a little market share to mineral wool, which accounts for about a quarter of the market. Important producers of sandwich panels in Western Europe include Brucha, Isopan, Lattonedil and Metecno. Earlier this year it was announced that the Irish company Kingspan, one of the largest players in the sandwich panel market in Europe, had bought the steel division of the Romanian group Teraplast.

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German Sun Protection Retailers Need To Catch Up in Online Sales

Not least the effects of the pandemic have further increased the importance of online sales. In the course of this, Interconnection Consulting conducted a mystery shopping test among 158 sun protection retailers in Germany. The results of the test show that the potential of online retailing is not yet optimally exploited in the industry.

The 158 sun protection retailers were questioned by Interconnection by mail, about a specific concern. The main concern of the mystery shopper was product recommendations for exterior sun protection and patio roofing. However, 65% of the responding retailers made neither a product recommendation for one nor the other. For about half of the companies (44.9%), an online enquiry alone is not sufficient. Only after a reminder email and telephone contact was the response rate 86.7%. Of the 137 responding traders, around 55% would like to have a telephone conversation and/or invite the customer to a personal meeting.

 

Quality of Service Leaves Much To Be Desired

The average response time was 3.9 days. Only about one in four dealers complies with the golden rule of the internet, with a reply within 24 hours. The enquiry not only contained a specific request, but also three additional questions (delivery time, assembly, guarantee). Almost two thirds of the dealers did not answer the three additional questions. Less than a quarter answer all three questions. Here, the importance of dealers answering questions is obviously underestimated. “Especially risk-averse prospects are lost due to unsatisfactory answers to the questions”, explains Panorea Kaskani, the author of the study. The study also shows that traders have very little interest in closing a deal. 86.1% of dealers who made an offer did not follow up, even though following up is an essential sales step in the customer acquisition process that should not be neglected, says Kaskani. Nearly half of the dealers took over 6 working days to submit an offer after initial contact. It was astonishing that not a single one of the dealers attempted cross-selling, although the market for sun protection delivers these opportunities, for example through insect and/or burglar protection.

 

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Service Deficit Uncovered at Austrian Sun Protection Retailers

Not least the effects of the pandemic have further increased the importance of online sales. In the course of this, Interconnection Consulting conducted a mystery shopping test among 155 sun protection retailers in Austria. The results of the test show that the potential of online trade is not yet optimally exploited in the industry.

The 155 sun protection retailers were questioned by Interconnection by mail, about a specific concern. The mystery shopper’s main concern was product recommendations for exterior sun protection and patio roofing. For four out of ten of the companies, an online enquiry alone was not enough. Only after a reminder email and telephone contact did around 92 percent of the surveyed retailers respond. Of the 143 responding dealers, 65 percent would like to have a telephone conversation and/or invite the customer to a personal meeting.

 

Room for Improvement in Quality of Responses

The average response time was 4.2 days. Only about one in five dealers fulfilled the golden rule of the internet, with a reply within 24 hours. The enquiry not only contained a specific request, but also three additional questions (delivery time, assembly, guarantee). More than half of the dealers do not answer the three additional questions of the mystery shopper. Less than a quarter answer all three questions. The importance of dealers answering questions is obviously underestimated. “Especially risk-averse prospective customers are lost due to unsatisfactory answers to the questions”, explains Panorea Kaskani, the author of the study. The study also shows that traders have very little interest in closing a deal. 86.1% of dealers who made an offer did not follow up, even though following up is an essential sales step in the customer acquisition process that should not be neglected, Kaskani concludes.

 

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Germans Remain Loyal to Laminate & Parquet Flooring, but Textile Floor Coverings Are Under Threat

Those who use textile floor coverings in Germany very often flirt with other options. Overall, almost one in two (45.7%) expresses a willingness for a new floor covering to replace the textile covering. The situation is quite different with laminate & parquet flooring, as shown in a representative survey by Interconnection Consulting.

Willingness to Change Lowest for Ceramics & Tiles

In the Interconnection survey, 1,000 homeowners (flat and house) were questioned in Germany. According to the study, only about one in four is willing to change their laminate or parquet flooring. The lowest willingness to change is in the ceramic/tile segment with only about 20%.

Living Room Is Parquet Land

Depending on the use of the room, different floor coverings are increasingly used. With a share of 85.7%, ceramics or tiles are the most-used floor covering segment in Germany. This can be attributed to the fact that ceramics/tiles are used by far the most in the kitchen, bathroom and hallway. In the living room, parquet or wood flooring dominates with a share of about one third (31.1%). The willingness to change is also limited and is only around 20%. “The main reason for homeowners not to change their parquet is the high-quality material of their floor covering,” explains Dr. Frederik Lehner, Managing Director of Interconnection Consulting. Laminate is the most commonly used floor covering in the study, bedroom and children’s room. When it comes to the image of laminate flooring, it shows that modernity and sustainability can still form a contrasting pair in this day and age. For example, laminate is considered modern by those surveyed, but not particularly sustainable. Overall, over 60 percent of homeowners use laminate as a floor covering.

Brand Potential Is Not Being Exploited

The study shows that two completely contradictory groups of buyers dominate with a total share of over 50%. On the one hand, there are the discount hunters, who can be encouraged to buy with discounts and cheap prices, and on the other hand, the high-price buyers, who don’t want cheap prices at all, but are attracted by quality criteria (innovation, haptics, etc.) and a great shopping experience. Addressing the entire market is therefore impossible for many manufacturers. “Normally, brands that have a good product for high-price buyers are also strong in such markets, but that is not the case in this market. Brand awareness is extremely low and the potential of brands is hardly exploited,” explains Dr. Lehner. Thus, the brand buyer is the smallest buyer segment with 13.5%. If a purchase of floor coverings is pending, Germans mainly look for information on the manufacturers’ websites (52.3%). This is followed by offline media such as manufacturers’ brochures and retail brochures. But social media is also becoming increasingly important. Of those who use it, buyers perceive Facebook as the most important source of information. However, the number of users is still manageable at 11%.

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New Conservatory Instead of a Holiday Trip

The market for conservatories and patio roofs in Germany, Austria and Switzerland (DACH) was a big beneficiary of the Corona measures, as a study by Interconnection Consulting shows. In 2020, sales rose by a staggering 16.6% and the boom will continue this year (+13.8%). Austria and Germany even grew by more than 20% in 2020.

Investing in one’s own home became a popular sport during the pandemic. After moderate growth figures in the years before the pandemic, the growth of sales, as well as the turnover of conservatories and patio roofs in the DACH region exploded. The high savings due to travel restrictions and other restrictions on public life were poured into the home. Sales in the sector increased the most in Germany (+21.1%) and in Austria (+20.8%). The Swiss market increased by “only” 13.2% in comparison. “Swiss single-family homes very often have large living rooms and window fronts and therefore, on the one hand, an addition with a ceiling is not necessary and, on the other hand, it is often not even technically possible,” explains Daniel Kollar, the author of the study. For 2021, Interconnection expects growth to continue at a similar level. Many providers are already reporting full order books until September. From 2022, business is expected to decline significantly because people will use their money for travel and other pleasures again. Interconnection expects an average annual increase of 2.0% for Germany, 1.7% for Switzerland and 0.6% for Austria between 2020 and 2024.

Five Companies Share Half of the Total Market

The study takes into account conservatories and patio roofs from profile and system suppliers. Profile suppliers deliver profiles and planning systems to metal builders who produce finished conservatories from these semi-finished products. Important profile suppliers are Schüco and Heroal. System suppliers deliver completely finished systems to building element dealers and metal builders, who then install them at the end customer (e.g. Gardendreams, Aluxe). The products are mostly made of aluminium, more rarely of plastic or aluminium-wood combinations.  Overall, it can be said that patio roofs grew more last year than conservatories (13.4%), with sales growth of 17.3%. Patio roofs account for 82.1% of the total market. In the DACH countries, the market share of the top five suppliers for conservatories and patio roofs is 49.2%.

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Highest Window Prices in Burgenland

Highest Window Prices in Burgenland

Window prices in Austria show great differences, as shown in a mystery shopping test by Interconnection Consulting. A total of 18 window manufacturers were put under the microscope. Increased security and better thermal insulation raise the prices of windows. There are also geographical price differences. The Burgenlanders, for example, have to dig deepest into their pockets.

Security Surcharge for Windows

Burgenland is in first place when it comes to the price of PVC windows, at 558.7 euros. Besides the leader, Vorarlberg, Salzburg and Lower Austria are also above the Austria-wide average price of 492.1 euros. The surcharge for increased security (increased window security, lockable handles) was around 22 percent in the PVC segment. The lowest offer prices for PVC windows, below 400 euros, were in Vienna. The situation is completely different for wood/aluminium windows where Vienna leads the price spectrum with an average price of 969.1 euros. The other side of the spectrum in this segment is Styria with around 745 euros. Customers have to spend on average about 13 percent more for wood/aluminium windows with increased security than for basic security.

Large Differences in Installation

The average installation costs were 3,042 euros, whereby the price range between the federal provinces diverged very strongly. Vorarlberg was at the top with over 5,300 euros and Vienna at the bottom with just over 1,650 euros. Only one in five providers also grant discounts. “Of the approximately 80 per cent that do not grant a discount, 15.7 per cent would only offer a discount after a personal discussion or when concluding the contract, or in the case of counter-offers. Besides the security features, however, it is also the brand that has a decisive influence on the price, as the study clearly shows,” concludes Panorea Kaskani, the author of the study.

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The North is Most Expensive

The mystery shopping test by Interconnection Consulting shows the regional differences in the German window market. It shows that windows are cheapest in the west and most expensive in the north.  A total of 18 window manufacturers were put under the microscope.

Security Surcharge for Windows

At 470.2 euros, the most expensive PVC windows are sold in the North. In the West, the price was on average 70 euros lower. The East and Southwest of Germany were also still above the average price of 437.3 euros. The surcharge for increased security (increased window security, lockable handles) was around 14 percent in the PVC segment. The most expensive wood/aluminium windows are also sold in the North with an average price of 962.8 euros. The West is also the cheapest in this segment. For increased security on wood/aluminium windows, one has to spend about 10 percent more on average than for basic security. “In addition to the security features, however, it is also the brand that plays a decisive influence on the price, as the study clearly shows,” explains Panorea Kaskani, the author of the study.

Big Differences in Installation

The average assembly costs were 3,042 euros, with the price range varying greatly in the five regions we studied (North, West, Southwest, East, Southeast). In this category, too, the North is clearly at the top with over 4,200 euros. The lowest installation costs are found in the South-East of the country at around 1,700 euros. Not even a quarter of suppliers grant discounts. “Of the roughly 77 per cent who do not grant a discount, more than half would however grant a discount after a personal discussion or when concluding the contract.

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Fastest growing solution for outdoor living benefits from the crisis

Bioclimatic pergolas have been steadily growing in the last 3 years and they reached a new high in 2020 with around 40.000 elements sold in the main seven European markets. “As families were forced to spend more time at home because of travel restrictions demand for outdoor living increased and bioclimatic pergolas grew even more than in 2019” explains  Dr. Armandi, the author of the study. In the next three years, the market will continue to grow at an average yearly rate of ca. 10% and will add more than 10.000 new units. Extra demand will in part covered by new players, but especially in the premium segment brand recognition will help established leaders top defend their position.

German market will recover the lost ground

Growth is manifesting in all countries as the product is relatively new whereas growth is a little bit lower in more mature markets, like France and Benelux. In aggregate, for all 7 countries under consideration, revenues have reached 280 million euros in 2020. The French market counts for more than one third of all bioclimatic pergolas sold in 2020, followed by Italy and Benelux. As a late-comer, the German market is expected to overperform in the next three years and will reach 11,1% market shares in 2023.

More players, lower prices, but still premium pergolas will keep growing

Average price have declined on average by -0,1% in 2020. Interconnection predicts a more moderate growth of average prices in the next 3 years as more players are entering into the market and as pergolas in the economy segment will take shares away from the medium segment. However, premium, high-quality solutions which now counts for 38% of the market will keep growing strongly especially in Benelux and the rising German market.

Pergolas with ZIP-Screens as side protection gaining popularity

Stand-alone pergolas constitute slightly more than 55% of the whole market, while those with a side protection element are expanding strongly, Among the different types of side protection, Zip-Screens are the most popular: two out of three bioclimatic pergolas are sold with at least one ZIP-Screens and this proportion is even higher in the premium segment . The three main competitors in Europe are Brustor, Pratic and Renson .

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Template Press Chart ENG 2020

Prefabricated House Market Grows Despite Crisis

Contrary to expectations, the crisis caused by the pandemic in 2020 had no negative impact on the prefabricated house market in Germany. A total of 23,006 housing units were built in Germany last year using industrial prefabricated construction methods, 4.9% more than in the year before. Forecasts for the next few years are also looking positive, as shown in a new study by Interconnection Consulting.

The growing importance of moving from the city to the countryside is having a positive effect on the development of the prefabricated house market. The prefabricated house segment is growing more dynamically than the general new construction of detached and semi-detached houses. The prefabricated house rate, which has been growing steadily for years, rose from 20.8% to 21.5% last year. “The Corona crisis did not hinder market development in 2020,” says Daniel Kollar. Above all, the significantly higher market security, the prices already fixed at the beginning of the project, the fixed deadline and the minimised risk of delays ensure large growth rates in the prefabricated construction sector. The east of the republic shows the strongest growth dynamics.

Turnkey Will Soon Overtake Floor Covering Solutions

Although most houses are still sold as floor covered buildings (market share 39.1%), there is a clear trend towards turnkey projects. As early as 2022, turnkey houses will represent the largest market segment, the Interconnection study predicts. In the long term, the segment of shell-finished houses will grow the least, although there are still manufacturers who cater exclusively to this segment, such as Massa or ProHaus. In terms of construction type, timber frame construction continues to gain in importance. This is explained by the increasing focus on the sustainability factor. “Sustainable building is becoming more and more important for builders and wood supports this trend as a renewable raw material” says Kollar.

Room For Competition

The German prefabricated house market is growing so strongly that competition is not so much between individual manufacturers, but rather with other construction methods. Deutsche Fertighaus Holding as a group of Okal, Massa and Allkauf continues to dominate the market and was able to further increase its market share in terms of volume in 2020 with stable growth. Overall, the market concentration of the top ten companies last year was 42.4%, a little below last year’s figure.

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Corona Boosts the Prefabricated House Market

The Austrian prefabricated house market was able to record strong gains last year despite the economic crisis. Especially in the second half of 2020, the market was able to more than compensate for the stagnation of the first six months and achieve growth of 5.9% compared to the year before. The trend towards prefabricated housing will also continue for the next few years, as shown in a study by Interconnection Consulting.

Despite the grim expectations for 2020 at the beginning of the pandemic, the trend towards home ownership drove the demand for owner-occupied homes up. Furthermore, the need of young families in particular to move from the city to more rural regions in order to realise the dream of owning their own home with a fitness room, home office space and their own garden is increasing, explains Daniel Kollar, the author of the study. Overall, the prefabricated house market is growing faster than residential construction. The prefabricated house rate is also increasing from 23.2% in 2019 to 24.2% last year. The prefabricated house rate will continue to rise steadily over the next few years, reaching 28.4% by 2024 from today’s perspective.

Turnkey for Generation Y

All providers in the study mentioned a clear trend in favour of turnkey houses. Whereas ten years ago, shell-finish houses were the most popular stage of development, this segment is already lagging behind with less than a quarter of the market share. “The current generation of customers have grown up in an affluent society and do not want to spend weekends and holidays on a building site,” Kollar explains the trend towards turnkey houses. For Generation Y, sustainability also plays a major role in the purchase decision. The timber frame construction method will therefore continue to gain slightly in importance in the coming years. Overall, timber frame construction holds a share of 72.1%.

New Suppliers, Tougher Competition

In general, last year saw a slight decrease in market concentration. The cumulative market share of the top five companies fell from 36.1% to 35.1%. In the case of the top three companies, the decline was even more pronounced. This is mainly due to smaller suppliers strongly gaining market shares. The most important manufacturers are Elk Group, Haas, Hartl, Mischek and Wimberger.

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Austrian Prefab House Market Shows Slight Improvements in Online Enquiries

The annual online mystery shopping test conducted by Interconnection Consulting in the Austrian prefabricated house market shows that the potential for lead generation is far from being fully exploited by companies. However, this year’s test shows that the manufacturers were able to achieve improvements in service in some areas. The study analysed the response of 70 prefabricated house manufacturers.

One Third of Manufacturers Do Not React at First

The prefabricated house manufacturers were contacted by e-mail regarding a specific concern about a building project. In addition, four construction-specific questions were formulated. Compared to the mystery shopping test last year, an improvement of the online customer service can be seen in some areas. About three quarters of the traders (78.2%) responded to the enquiry during the first online contact, which is an improvement on the 65.3% last year. After a reminder email and  telephone contact, the proportion of manufacturer response increased to 97.1% and was thus significantly higher than in the previous year. However, the test also revealed some negative developments. For example, the willingness to respond to the questions asked fell from around 80% to 64.3% compared to the previous year.

Closing Weakness on the Rise

Manufacturers are choosing different strategies to close the deal. Despite the pandemic, almost two-thirds still prefer a face-to-face meeting. Slightly less than a quarter would like to have a telephone conversation. Compared to neighbouring Germany, Austria still has some difficulty using video calls as a means of closing deals.  Only 12.3% suggest this option. Furthermore, the mystery shopping test shows that the potential in online customer service is far from being fully exhausted. “Especially when it comes to closing a deal, only few manufacturers really make an effort”, explains Panorea Kaskani, the author of the study. To make matters worse, manufacturers are following up less than last year.

Speed Not Yet Everywhere

The average response time to email enquiries did improve compared to last year, and reached 2.4 days. 61.8% of manufacturers comply with the golden internet rule: “Reply in 24h”. Furthermore, one in five manufacturers did not respond to the four questions asked. Kaskani explains the importance of quality in answering questions as follows: “Especially risk-averse prospects, who form a large customer segment, are lost due to unsatisfactory answers to the questions”. The potential for lead generation is thus far from fully exhausted by companies.

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Study Reveals Service Deficit Among German Window Dealers

In Germany, over 90% of buyers use the internet as their first source of information and initial contact. However, it turns out that many window dealers have not yet fully seized the potential of the internet, as shown in a mystery shopping test by Interconnection Consulting among the 176 dealers with the highest market share. There are usually big differences between the dealers, both in the speed of processing pure email enquiries and in the quality of the answers.

Only Half Make an Offer

The 176 window dealers were contacted by Interconnection via email, regarding a specific request for a new project. For about half (46%) of the companies, an online enquiry alone is not sufficient. Only after a reminder email and telephone contact, around 93% of the surveyed dealers responded. The number of window dealers who made an offer fell dramatically compared to previous years, reaching only 51.8% this year. The dealers chose different communication channels to submit an offer. Of the 85 dealers submitting an offer, about one third suggested a telephone conversation or a face-to-face meeting, even if this was only possible to a limited extent due to the pandemic. Almost two-thirds send their offer by e-mail. The follow-up rate is dramatically low: only two of the 85 traders who submitted an offer asked whether there is still interest.

Some Dealers Do Not Answer Any Questions

The average response time was 4.3 days. Around 40 percent of the dealers fulfilled the golden internet rule- reply within 24 hours. The average time for making an offer was 3.7 days. The enquiry not only contained a concrete request, but also three questions on the topics of window handles, warranty and installation. Less than one third of the dealers responded to all three questions asked. Around eight percent of the dealers did not answer a single question. The importance of dealers answering questions is obviously underestimated. “Especially risk-averse prospective customers are lost due to unsatisfactory answers to the questions,” explains Panorea Kaskani, the author of the study.

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Window Dealers Only Score Mediocre in the Mystery Shopping Test

In Austria, more than 90% of shoppers use the internet as their first source of information and first contact. However, it has been shown  in a mystery shopping test by Interconnection Consulting, that many window retailers have not fully seized the potential of the internet. The reaction of the 163 dealers was analysed. There are usually big differences between the dealers, both in the speed of processing pure email enquiries as well as the quality of the answers.

Less Than Three Quarters of the Dealers Create Offers

Interconnection contacted 163 window dealers by email, regarding a specific request for a new project and asked three additional questions. Two thirds of all dealers responded to the first email, which is an improvement on the year before, where this figure was still far below 50 percent. After a follow-up mail, around 96 percent of the dealers responded. The number of window dealers who made an offer fell dramatically compared to previous years and this year was 62.8%. The dealers chose different communication channels to submit an offer. Of the 98 dealers submitting an offer, around a third would like to make a telephone call or invite the customer to a personal meeting. Almost two thirds send an offer by e-mail. The follow-up rate here is dramatically low: only 7.1% of the dealers who send an offer ask whether the customer is still interested.

Online Service in Need of Improvement

The average reaction time was about 3.5 days. About half of the retailers followed the golden rule of the Internet: reply in 24h. The average time to submit an offer was 7.2 days. The enquiry contained not only a concrete request, but also 3 questions about window handles, warranty and installation. Less than a third of the dealers answered all three questions. Shockingly, over 15 percent of the dealers did not answer a single question: “Particularly risk-averse interested parties are lost due to unsatisfactory answers to the questions,” says Panorea Kaskani, the author of the study, explaining the relevance of the dealers’ answers to the questions.

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German Prefab-House Market Shows Only Slight Improvement in Online Enquiries

Online customer service is the order of the day and should be a main priority for companies, especially in times like these. However, the annual online mystery shopping test conducted by Interconnection Consulting in the German prefabricated house industry shows that online customer service is still not satisfactory. Both the speed and the quality of the processing of online enquiries have room for improvement. The study analyzed the performance of 104 prefabricated house manufacturers.

One Third of the Dealers Do Not React at First

The prefabricated house manufacturers were contacted by email on the basis of a specific request concerning a building project. In addition, four construction-specific questions were formulated. Compared to the mystery shopping test in the previous year, an improvement is evident in many areas of online customer service. This time 64.4% (2019: 61.5%) responded to the initial email enquiry. After a reminder email and telephone contact, the proportion of manufacturers’ responses rose to 97.1%, which is significantly higher than in the previous year (90.4%). The willingness to respond to questions also improved significantly, reaching almost 60% this year. However, the test showed that there have also been negative developments. For example, the willingness to send information material or online links or PDF transmissions was far below the previous year’s figure. More than half of the manufacturers did not send any information material.

Final Weakness Increases

Furthermore, the mystery shopping test shows that the potential in online customer service is far from exhausted. “Especially when it comes to closing a deal, only a few manufacturers are really making an effort,” explains Panorea Kaskani, the author of the study. Thus, the overall focus on closing deals shows a decline compared to the previous year. Manufacturers choose different strategies to close the deal. Around a third prefer a personal meetings. A little less than half want to have a telephone conversation. Due to the corona pandemic, 28.2% now choose to use video chat.

Speed Not Yet Everywhere

Compared to last year, the average response time to email enquiries has improved. This year, it was 3.7 days, compared to the 5.5 days in 2019. Nevertheless, only 43.6% of manufacturers comply with the golden Internet rule: “Reply in 24h”. Around one in ten manufacturers needed more than ten days to respond to the request. Kaskani also emphasizes the importance of quality in the answering of questions: “Especially risk-averse prospects, who form a large customer segment, are lost due to unsatisfactory answers to the questions“. The potential for lead generation is thus far from fully exploited by companies.

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Renovation keeps raised floors afloat despite losses

After 2 years of sustained growth, the raised floor panels market has been affected by the COVID-crisis and is expected to experience a quantity loss -6,0% in 2020. Despite an increase in renovation, the fall in new non-residential projects, especially office/administration and commercial segment in the next 2 years will keep the market well below the 2019-level until 2023, as quantity growth will resume only in 2022 in most countries.

 

 

Wood and mineral panels most popular as premium solutions

 

The largest material segments for raised floor panels are mineral with 31,0% quantity shares, which are however falling a bit in part for a reduced availability of the raw material, and wood with 30,6%, which is expected to raise up to 31,1% up to 2023. Wood is already the biggest segment in France, Spain and Benelux, while mineral panels are above 40% in Italy and Germany.

Encapsulated steel is at 28,0% and is the dominant material in the UK market with 68% quantity shares, regaining some of the lost shares as aluminium prices stabilized in 2020.

Hollow floor is extremely popular in Germany with 22,0% quantity shares, but is losing relative to the other segments because of their reduced functionality, especially for office and data centers.

 

 

Public investment as silver lining?

 

Among the positive factors, more investments in healthcare and education by European government will help limit the losses in the next 3 years. Still, most panels are destined to offices and to commercial enterprises and new constructions for these segments will decline strongly in 2021 as new projects will be put on hold. At the same time, renovation of offices rose a bit in 2020 as companies take advantage of the temporary absence of workers during lockdown for restructuring internal areas.

 

 

European companies dominates the market

 

The European market is strongly concentrated, especially in the premium segment, with international and local players counting for 80% of the market and the TOP5 counting for 45% of the total market. Some acquisitions in the last few years increased market concentration further and created some bottleneck for raw materials, in particular for mineral panels. Among the main companies, there are Kingspan (mainly encapsulated steel), and 3 German players, Lindner, Knauf and Mero

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Pause for breath for Europe’s Residential Construction

In many parts of Europe the Corona-Pandemic was not the trend changer for the residential construction sector but an accelerator for a becoming apparent cool down. Building completions will drop by 9,3% in 2020 in the analyzed countries and are expected to record deep double digit negative growth (-13,3%) in 2021 as shown by the latest study from Interconnection Consulting.

 

Germany working off order books

 

Construction stops, security- and hygienic restrictions as well as a lack of work force due to closed borders are the reason for the bad mood of the construction industry and the declining investment readiness. While in countries like Germany and Austria the downturn has been herald, countries like France and the Nordics already expected a cool down of the residential construction activity despite COVID-19.  A specific of Germany is that for years the number of building completions cannot keep pace with permits. “Construction companies are recording full order books. Consequently the recession in Germany does not hit the industry as hard as there is still a lot of work to handle” explains Ernst Rumpeltes, author of the study. Accordingly the number of building permits exceeded the completions by over 50.000 dwellings the last few years. Building permits are expected to decline by 14,6% this year. The biggest drop on permits will be recorded in Italy (-36,7%) which has been strongly hit by the crisis. Similarly the situation in Poland and Hungary where residential building permits are expected to decline by  over 20%.

 

 

A case can be made for multi-storey buildings

 

Even though building permits are dropping in Poland, the decline of building completions is the lowest compared to the rest of Europe. On the other end of the scale Italy and Spain can be found – the two countries hit hardest by the pandemic. In contrast to detached- and semidetached houses, multi-storey buildings still benefit from rising urbanization and housing shortage in metropolises. Especially in Germany this trend can be observed where the share of completed apartments increased from 36,7% in 2008 up to 60,6% in 2019.

 

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Despite the Crisis, Prefabricated Houses are on the Rise Across Europe

The dramatic crash of the construction industry due to the Corona crisis can be felt in all EU countries and will also affect the prefabricated house sector. The prefabricated house market in Europe will therefore decline by 9.7% this year. After a further decrease in 2021, the market is expected to recover in 2022. Despite the drastic decline, the quota for prefabricated houses will increase across Europe, as shown in a study by Interconnection Consulting.

Throughout Europe, the prefabricated house rate will increase from 12.1% to 13.0% in 2020. In Western Europe, the rate will increase from 15.3% to 16.6% this year. The prefabricated house ratio is also set to increase marginally, reaching 7.5% in Eastern Europe. The trend, which has led to a steadily growing proportion of prefabricated houses in Europe for years, will continue during the Corona phase. Italy and Russia are two of the few countries with a negative development in the number of prefabricated houses in 2020. The country with the largest percentage of prefabricated houses is Sweden, with 81.3%. Contrary to the Europe-wide trend, sales of the prefabricated house industry in Germany will increase by 4.8%. In Austria too, a growth of 4.8% is expected this year. The largest growth rate during the Corona phase is expected in Spain. Between 2020 and 2023, Interconnection forecasts an average annual increase of 7.5%.

The Proportion of Single-Family Houses Continues to Grow

The European prefabricated house market is clearly characterized by single-family houses. With a market share of 75.1%, they dominate the market and show the lowest negative market growth compared to two-family houses (-10.6%) and multi-storey residential buildings (-19.2%), with a decrease of only 7.3%. Croatia has the highest single-family house rate for prefabricated houses at 95.5%. For comparison, the rate is 84.5% in Austria and 88.4% in Germany. Compared to most European countries, prefabricated multi-storey residential buildings are very popular in Denmark and represent 39.2% of the market.

Turnkey Solutions are Taking Up

In general, the shell finished and turnkey houses are developing better than floor covering houses. Overall, turnkey expansion is already dominating in many places. In Spain, the sales share of turnkey solutions is 86.3%. Turnkey solutions are also the most popular in Hungary, Poland, Switzerland, France, Great Britain and Italy. In Germany, however, the floor covering houses are just ahead. In Croatia, on the other hand, turnkey solutions are not at all popular and hold only 2.2% of the market. Cultural differences have a great impact on the construction method. While solid construction is an exception in Sweden and timber frame construction dominates with a share of 95.2%, it is conversely the solid construction that accounts for the lion’s share in Croatia with 87.9%. In Germany, solid construction shows a lower increase compared to timber frame construction. According to the study, solid construction is expected to increase in Austria, if only slightly.

 

 

 

 

 

 

 

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Curtain Wall Market is Facing Difficult Times

The six most important markets for curtain walls in Europe (Germany, France, Spain, Great Britain, Italy and Poland) posted a decline in sales of 0.6% in 2019. Follwoing the most likely scenario, the COVID crisis will cause a sharp drop in sales this year (-4.5%). But even after that, the market will find it very difficult to get going, as shown in a study by Interconnection Consulting.

Ray of Hope in Two Years

The decline in sales across Europe – in the most likely scenario – will continue until 2022. While sales in the previous year were around 21.8 million square meters, they will most likely only make up 19.8 million square meters in 2023, as a low demand for new investments in the construction industry is expected until 2022. The developments caused by the crisis in the individual countries are all different. Italy will experience the largest decline in 2020 in the most likely scenario (-12.2%), followed by Great Britain (-9.9%), although it can be said that for both countries this is simply continuing their decline in sales. By far the largest market, Germany, will lose 3.8% of its sales volume this year, ending a long upward phase. On the other hand, France and Poland will actually end 2020 with a slight increase in sales. However, sales volumes in these countries will also decline sharply in the following years due to the consequences of the crisis.

Trending New Materials

In terms of materials, aluminum-glass holds the majority with a share of 82.6%, followed by steel-glass. While the steel segment continues to lose shares, aluminum will continue to expand its market position. However, the strongest trend can be seen in other materials, such as wood-aluminum or wood-glass systems. Alternative elements such as stone, ceramic or plastic are also being used more and more frequently.

Housing Construction Will Collapse

The market share of property construction is 89.5%. With almost half of total sales, the office segment is the strongest customer segment. This is followed by retail (18.7%) and industry with 14.1%. The greatest losses are expected in residential construction, whose sales will fall by 8.3% this year. Around three quarters of the sales volume is used in new construction.

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Residential Ventilation Market Strongly Affected by Covid-19

The market for Residential Ventilation in Europe rose last year (2019) by +2.4% in terms of value, after 2.1% in 2018 and after growing strongly in 2017 (+7.1%) due to favorable construction activity. A decline in building completions and increasing market saturation, especially for central systems with heat recovery, are responsible for the weak growth rates of the past two years. For 2020, Covid-19 is expected to post a strong minus growth of -8.1% by value, with the countries examined being affected differently by the effects of the pandemic and recovery is not in sight for most countries until 2022 or 2023, according to the new study by Interconnection Consulting.

Current indicators suggest that the market for residential ventilation in the analyzed markets (Germany, Austria, Switzerland, France, UK, Italy, Poland, Benelux, Nordics ) will rise by 0.6% annually until 2023 in terms of units sold. However positive growth is expected in some countries not to return until 2023 again.

Of the investigated countries, Austria showed the strongest growth with +6.4% in terms of quantity sold recorded (with simultaneous decline in value of -3.0%), while Poland with 5.0% growth in terms of quantity (+6.5 % by value) most solidly developed overall. The Swiss market shrank by -0.8% in units, but even lost by -3.9% in value. Germany showed overall growth of 3.6% compared to 2018, whereby also here a double digit growth decentral (local) systems with heat recovery had to compensate for the decline of the central systems with heat recovery.

Measured by sales value, considering all the countries examined, Decentral Ventilation units with HR currently account for 10.2% while Central Systems with Heat recovery account for 42.4% and the rest (47.5%) goes for Exhaust Systems without heat recovery. Comparing these numbers in terms of quantity (units sold), exhaust air systems without heat recovery, as well as decentralized systems (with heat recovery) are much more represented due to the lower average price.

Central systems with market saturation

In a whole number of the countries examined, the growth in central units (with heat recovery) was negative, although a differentiation must also be made in some countries. In part, the decline mainly affected systems with lower output (capacity in m³), while more powerful systems (but the quantities of which are sold in significantly (!) lower quantities and can also be used in areas such as schools, kindergartens, meeting rooms, in addition to residential construction), could even record increases. According to industry insiders, manufacturers also like to focus on this area because in some cases even higher margins can be achieved. The manufacturing costs for larger systems are only marginally higher in relation to the significantly higher prices that can be achieved with more powerful units.

Another influence on the systems used, is the increasing proportion of apartments (multi-storey residential buildings), while the proportion of one and two-family houses is declining year after year in almost all countries. In Austria, for example, the industry complains that it is becoming increasingly difficult to argue the investment costs (which goes along with the installation of a central unit with heat recovery systems). Here more and more cheaper alternatives such as decentralized systems or exhaust air systems without heat recovery are used. There is also a lack of necessary funding that could compensate for this trend. In subsidized, social housing, the argument of creating the cheapest possible living space is often in the foreground.

A small ray of hope in the comparison of countries remains Poland, where central systems also saw significant growth in 2019.

Italy is still a special case. Although prices there have been under pressure for years (with high single-digit price declines and ruinous average prices for many manufacturers, especially in the southern region of Italy), the market for central systems fell again in 2019 by -7.8% with a small volume 1.8% increase. Great Britain is another market that is avoided by some manufacturers due to the low product prices and high market concentration in some areas.

Price differences also result from the prevailing country-specific distribution. While Austria and Switzerland mainly rely on two-step direct sales through installation companies, in most other regions indirect three-step sales are more common. Therefore, the average prices (measured as sell-in prices at manufacturer level) in the two countries mentioned are also higher than in other markets, although the significantly higher prices in Switzerland do not fully explain this.

Decentralized systems are booming in “established” countries

Decentralized systems with heat recovery were able to achieve significant growth in almost all countries, provided there is a market in the respective country. Such systems are hard to find in Switzerland or France e.g. but the market for these products is also relatively small in Northern Europe and the Benelux. In Italy, decentralized HRV in 2019 increased by + 25.8%, in Germany still by + 13.2%, bringing Germany to around 225 thousand decentralized units. Decentralized units, which in turn were divided into transverse systems and single room fans, were able to record cumulative growth in all countries examined. In Germany, however, it is primarily transverse systems that contribute the majority of the growth of decentralized systems with HR. However, there is also a strong price war in this area, with the average price only going down in 2019, for example, in Germany, since some manufacturers with very low average prices in this segment were able to show particularly high growth. Since many manufacturers obtain their products from a few OEMs, it is all the more difficult to differentiate them from the competition.

The lion’s share of the decentralized systems is for wall and ceiling mounting, only a very small part is for window ventilation. Window ventilation is only occupied by a few companies, but is considered a market with high growth potential. Even if the competition is manageable in terms of the number of companies, the difficulty lies in the production of large quantities with simultaneous, individually tailored production, which is why some players have already withdrawn from this field. Schüco, which recently launched a new product in cooperation with Renson, is currently making a new start.

Exhaust systems are growing constantly

In all countries examined, the growth of exhaust systems was around 2.65% by volume, with over 75% of the systems being distributed by decentral systems(bathroom / toilet fans) . However, there are very large country-specific differences, for example central exhaust air systems without heat recovery systems are almost not widespread in some countries. A particularly large proportion of the exhaust air systems are in Great Britain, where the market leader already covers a very large part of them.

Corona and its aftermath

Already before Corona, there were already some signs of a slowing economy, such as a decline of economic growth and building permits showed. Due to the pandemic, the situation has worsened again drastically. Some effects of Corona crisis, such as closed construction sites and projects in which the completion was postponed, directly had an impact in 2020; other effects will become noticeable in the coming 1-3 years for the industry, when the number of building completions drops dramatically. Shortly before the lock-down, there was even a brief increase in demand as a kind of pull-forward effect, since manufacturers were still trying to adequately stock up on components, but this effect has long fizzled out.

While DACH or the Netherlands have come relatively well by the pandemic, the lock-down was considerably more problematic in countries such as Italy, Spain, Great Britain and Belgium. Limited Distribution through wholesalers, delays due to closed borders, lack of supplier products and logistics services, or non-existent labor from Eastern European countries, brought many companies already in the last 3 months into trouble. A shutdown at construction sites or requirements, preventing appropriate coordination of trades locally along with concomitant quality problems – will also lead to further difficulties.

As for the manufacturer of ventilation systems, mainly producers of customized ventilation solutions had considerable problems when products already manufactured and ready to ship, were no longer accepted (due to postponed or closed construction projects/sites) by customers as they could not be disposed otherwise.

The emerging demand for new construction projects and thus declining building permits is particularly problematic because the financing of many projects is “on hold”. Although non-residential construction is hit even harder than residential construction, there is also a negative downward spiral here. In Germany there are also further delays in the approval procedures, since in times of shutdown, many procedures of the already overloaded authorities remained unprocessed and the old procedures first have to be worked through. Billions are currently being pumped into the economy and states are outbidding themselves with economic stimulus, support and tax deferral programs, but the state will not be able to sustainably promote such programs in the long term, and these loan-financed financial injections will also have to be repaid one day.

The long-term development of residential ventilation will also be largely determined by the extent to which it can be established as a fixed component of newly created living space in the future. This in turn depends heavily on raising awareness within the population, on the need for energy efficiency and high air quality through constant fresh air supply.

Overall market concentration increased

Overall, the market concentration has slightly increased compared to last year. The 126 companies analyzed in the report have a combined market share of over 91% regarding the total market. However, the top 30 already have a market share of approx. 72%, although in smaller countries the market concentration is often significantly higher. Despite some very international companies, there are still local heroes in most countries, that play a significant role. The leading companies in Europe include: Aldes , Atlantic, France Air, Helios, Itho , Maico , Soler & Palau, Swegon , System Air , Volution Group , Zehnder, etc. to name just a few. In recent years, many companies have also tried to increase their reach through acquisitions and mergers. These include, for example, Helios ( Vallox ), Zehnder (Paul, Enervent , Greenwood , etc.), Soler & Palau ( Pluggit, Envirovent, Unelevent…), Volution Group (Inventer, Pamon, Ventilair…) and many more;

As part of a competitive analysis, the complete study shows the market shares of the top manufacturers at country and segment / product group level, as well as all market data at country level in detail.

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Residential Race to the Bottom at it's Beginning

2020 will finally stop the longstanding upswing  of the construction industry due to the Corona-Crisis. For this year a decline of -2,7% of the residential construction activity is expected, which is only the beginning of the downward trend, as Interconnection Consulting shows in its latest report.   

 

Bottom will be reached by 2022 

Tightened hygiene- and safety regulations curb the residential building completions already in 2020. Furthermore, closed borders led the shortage of skilled workers on the construction sites which delay completions further. Short-time work and massive unemployment clearly have a negative effect on purchasing power and investment readiness of local households. Consequently investments in  homes are expected to decline leading to a drop of building permits in 2020 by 14,9% compared to the previous year which will obviously effect building completions within the upcoming years. While the downward trend in 2020 will be comparatively moderate, Interconnection’s forecasts for 2021 are drastic with a decline of -8,7%. Due to the delay between building permits and completions of residential buildings, completions are expected to hit the rock bottom by 2022 while in 2023 we can expect a recovery.

 

Urbanization further Rising 

Due to declined private incomes building completions of detached- and semidetached houses are expected to drop over proportional. While detached- and semidetached houses accounted for 29,0% of all completed dwellings in 2019 this share is expected to drop to 25,0% in 2020. Even though a slight recovery of this segment is expected, the big trend of urbanization continues regardless the corona-crisis. Consequently construction of apartments will further increase. Was the ratio between apartments and detached/semidetached houses 50:50 back in 2008 a significant shift towards apartments within the last ten years (71% to 29%).

 

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Outdoor venetian blinds hope for a rebound after COVID

Outdoor venetian blinds hope for a rebound after COVID

After years of sustained growth, the market for outdoor venetian blinds for the 7 major European markets (Germany, Austria, Switzerland, France, Spain, Italy and Poland) will suffer a setback in 2020 due to the impact of the COVID-19 crisis. The market will fall by -3,7%. In new study, Interconnection predicts that quantity sold will experience a gradual rebound in the next years, while the volume in 2025 will raise above the 2019-level in all markets analyzed.

 

DACH-Region Overrepresented

The popularity of outdoor venetian blinds as exterior sun protection element in the DACH-Region is well-known and strongly defines volume and trend for the whole European market. The German market is by far the biggest market with 49,6% shares,  followed by Switzerland and Austria. Still, it will take some years before Germany will reach the pre-crisis level. Rebound will be faster in some of the less mature and, at the same time, fastest-growing countries, as France and Spain. In 2019, the Spanish market grew by +5.3%. In Southern Europe venetian blinds have been struggling to take shares away from other, more traditional, sun protection elements, as wood and roller shutters. For example, the Italian market is less than 1/10th of the German one.

Fall in aluminium price could make blinds more competitive

A positive feedback on total volume sold could be lower prices for raw material, as ca. 90% of all venetian blinds are made of aluminium and price of aluminium had been growing stronger before the crisis. This could help producers to take advantage of the situation and help venetian blinds to become more competitive relative to alternative solutions. One of the reasons why average prices of blinds is relatively high is the motorization level which is dominant reaching 93% in France. Only in Poland only 64% of venetian blinds are sold with a motorization system.

More players, concentration declines

In the last 5 years more sun protection players have started to produce their own venetina blinds and, since 2017, Interconnection recorded a trend towards lower concentration among the top producers. Still, the Top 10 companies covered in 2019 59,8% of the total volume. Some of the Top 5 have lost shares in part because present only in the more mature markets. Roma and Hunter Douglas gained shares in 2019.

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Difficult Years Ahead for Fire Rated Doors

After a very promising start to the new year, the fire door industry in Western Europe experienced a major slump. In the first quarter of 2020, the market fell by 11.5 percent in value compared to 2019. For the full year, Interconnection Consulting expects a decline of 5.6% compared to the previous year. The market level of 2019 is not expected to be reached again until 2023.

Italy, Denmark and Sweden Will See Double-Digit Declines

In Germany, the largest market for fire rated doors in Europe, a decline of 7.4% is expected for the year as a whole, caused in large parts by the strong declines in non-residential construction. One of the strongest slumps in the EU is currently forecast for Italy (-10.1%), while the fire rated door market in the Benelux countries and Great Britain will lose 8.7% and 7.6% respectively. Scandinavia is also hard hit by the crisis and will lose a total of 9.6%, with the decline in Denmark and Sweden likely to be in the double digits.

Great Expectations for EN16034

The market has high expectations for the introduction of new standards for the harmonisation of directives within the EU and Turkey in order to guarantee fair conditions for the manufacturers. However, these changes, which came into force in November 2019, only affected exterior doors and sliding doors. “The outer doors in particular affect only a slight proportion of all fire rated doors and therefore the effects on price harmonisation are not yet as strong as desired,” explains Jan Hudak, the author of the study. However, this is one of the big goals to narrow the big price differences in different countries. Therefore, in the future, wooden doors with fire resistance of 90 and 120 minutes will dominate at the upper end of the price scale, while steel doors will remain dominant at the lower end of the resistance scale (30 min and 60 min).

Gloomy Outlook

The fall in demand in the first half of 2020 will be somewhat weakened from September due to the building permits already issued – which total around 3 billion euros. The two-digit decline figures that are expected by summer can thus be partially offset. Nevertheless, the gradual easing of measures to curb COVID-19 will only partially lead to recovery. The market for fire rated doors will not fully recover from the crisis until 2022.

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Curtain Wall Industry in Germany Will Only Recover Slowly

Sales of curtain walls increased in 2019 by 4.2% to 7.2 million square metres. In 2020, sales are set to decline by 3.8% due to COVID-19, as shown in a new study by Interconnection Consulting. The industry will only slowly recover from the effects of the pandemic by 2023.

In 2020, due to the consequences of the shutdown, sales will most likely decrease to 6.9 million square meters, as the study shows. By 2023, this value will increase slightly, up to 7.0 million square meters. The crisis is set to end the continuous growth of the industry in recent years. The industry recorded an increase from 6.0 to 7.2 million square meters in the five years between 2014 and 2019.

Wood on the Advance

Aluminum is the dominant product group with a share of 78.5% and is not set to lose any of this majority in the future with above-average market growth. Lower growth and thus falling market shares can be expected for steel-glass combinations. The strongest upward trend is the wood-glass combination. „The advantages of the trend-material, like sustainability aspects and easy handling contribute to the rise of this material group. In addition, wood is renewable and resistant and has very good thermal insulation, ”explains Daniel Kollar, the author of the study.

Trade and Industry are Catching Up

The strongest sales segment by far for curtain walls is the office segment with a share of 43.2%, followed by the retail segment with 21.5% and industry. Only then comes the residential segment, which so far only accounts for 12.3% of total sales. This proportion will not increase until 2023. On the contrary, the residential segment will continue to lose shares, while the retail and office sectors will see the largest growth rates until 2023.

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Europe's window markets are far from united

Windows as a product are becoming more and more technologically alike across Europe, but international differences in buying behaviour are gigantic, shows a recent study by InterConnection Consulting. While the brand is what counts in Austria and safety is the main factor in Germany, Polish buyers are especially interested in innovations, although this may seem surprising. This information is based on a survey of 500 homeowners from Germany, Poland, France, Austria and Great Britain.

 

Brand Awareness Highest in Poland

 There are big differences in Europe when it comes to the importance of window brands. Poland is the country in which brands play the biggest role. Oknoplast, Drutex & co. have managed to create a brand awareness, achieving a free recall of 16% – 32%. The brand per se is also an important reason for purchase in Poland. Austria is similar, with Internorm and Josko performing just as well with free recall values ​​around 20-30%. The situation is quite different in Germany, where the top window brands are experiencing a low-single-digit free-recall, while Velux (a roof-top window manufacturer) and Schüco (a system supplier) have reported significantly higher values.

 

Bargain Hunters Dominate the German Market

There are also European differences when it comes to reasons for purchase and price sensitivity. Germany has the largest share of „bargain hunters“ at 35%. Here, the window buyers are often focused on discounts, they compare prices and are not willing to pay more for brands. France, however, is the opposite, boasting 35% high-priced window buyers. These customers are enthusiastic about innovations and like to pay more if the product meets their high requirements. The distribution across buyer types varies greatly in each of the countries studied.

 

Wooden Windows Fail to Retain Customers

The Interconnection window study also examined window materials across homes. PVC is the most commonly used frame material among homeowners and is the most popular in all countries studied. Overall, homeowners are satisfied with plastic windows and are barely willing to switch to another material. The willingness to change is 15% lower than with any other material. Wooden windows paint an entirely different picture. Across Europe, home owners with wooden windows were extremely happy to switch to another material: between 53% and 67% of the owners of wooden windows would opt for another material at the next purchase, preferably PVC. The main reason for this trend is the high maintenance wooden windows require. Furthermore, it seems wooden windows have not (yet) benefitted from the new ecological and climatic awareness.

 

Online Affinity Highest in Poland

Poland boasts a particularly high use of online channels for window- research and purchases. 75% of Polish buyers use online resources, such as manufacturer- or retailer-websites, to inform themselves about brands and products before buying their windows. Poland is also the country with the most online window-purchases in Europe. By contrast, window buyers from France show the least willingness to purchase windows directly online.

 

No Such Thing as the „European Window Buyer“

The international differences in the buying behavior of window buyers will remain relatively stable over the next few years. If you want to be successful in the European window market, you should be aware of the different purchasing habits and align your sales and marketing strategy accordingly.

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Market for floor heatings benefits from rising construction of detached houses

The market for floor heatings in the DACH-region not only benefits from the construction boom but also from rising popularity of surface heatings. In 2018 sales increased by 4,2 percent compared to the previous year. Until 2021 it can be expected that the market will reach a level of 27,9 mil. square meters representing an annual average growth (CAGR) of 0,9% – as growth dynamic will slow down significantly from 2019.

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Two-thirds of German Window Dealers Give Automatic Discounts

A mystery shopping test conducted by Interconnection Consulting revealed that 66% of dealers offset their high window prices by offering automatic discounts. Overall, there are large price differences among the 20 window brands surveyed. There also happen to be geographic price differences. Southern Germans, for example, have to dig deeper into their pockets when purchasing windows than their compatriots in the north.

 

With an average price of EUR 342.70, Northern Germany has the least expensive PVC windows on offer. Far more expensive are the Southeast and Southwest regions, where average prices for PVC windows are 10% and 18% higher, respectively. However, the most expensive region in this segment is the East (EUR 408.30). In the wood/aluminum window segment, the highest average price of EUR 704.60 can be found in the Southwest, followed by the West, the Southeast, and the North at EUR 655.90.

 

Installation Most Expensive in the East

For comparable wood/aluminum windows (1000 x 1400), the price difference between the cheapest and most expensive providers is 100%. “You’re not just paying for security features or good heat values, you’re also paying for the brand,” explains Viorica Jeler, author of the study. In the case of PVC lift-and-slide doors, the average price was EUR 3,405 and thus significantly lower than in Austria (EUR 4,280). The mystery shopping test also inquired about installation prices. The average price in Germany was EUR 2,557, slightly higher than in Austria (EUR 2,274). Interestingly, the cost of installation was highest in the East (EUR 3,096) and lowest in the West (EUR 2,007). Regarding window suppliers, many of them offset their high installation prices by offering generous discounts. Around two-thirds of the dealers (66%) grant automatic discounts.

 

Safety Pays Off

Features like lockable handles that increase window safety generally go hand-in-hand with higher prices. Compared to standard models, prices for safety windows are on average roughly one-third higher. In Austria, customers pay significantly more, namely 61.1%, for safety windows than for standard models. Interestingly enough, increased safety in wood-aluminum windows is much more expensive than with PVC windows. “This is just one indication that there are still many price potentials to be exploited in the German window market, in spite of what one often hears that the customer is only interested in the price,” explains Viorica Jeler, author of the study.

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Bioclimatic pergolas: an innovative product with high growth potential

The European market for Bioclimatic Pergolas is expanding steadily and will grow at 7,7% in quantity in 2018. In the next three years, it will continue to grow at an average yearly rate of 5,9%. Growth is manifesting in all countries as the product is relatively new whereas growth is a little bit lower in more mature markets, like France and Benelux. In aggregate, for all 7 countries under consideration, revenues have reached 218,2 million euros in 2018.

France, Benelux and Italy as biggest markets

Bioclimatic pergolas are quite sophisticated sun protection systems and have to be considered as an alternative to textile patio pergolas. First introduced in Benelux and France, they become quite popular in Italy in the last 2-3 years. These three are the biggest market as of 2018. In France the market will grow at 5,5%, while the Italian market will be still expanding by 7,7%. In all other countries, apart from Benelux, quantity will grow above 10% in 2018.

Higher prices in Benelux and in German-speaking areas

In terms of price segment, the seven markets are relatively differentiated. In Benelux, where the main premium brands dominate the market, average prices are higher and the premium segment (>800€ per square meter) covers 43,9% of all pergolas sold in 2018. Lowest average prices have been detected in France and Spain, whereas pergolas in the premium segment are above 40% in Germany, Austria, and Switzerland.

Stand-alone pergolas as most popular solution

Stand-alone pergolas constitute slightly more than 50% of the whole market. Pergolas with side protection (against wind and rain) are expanding strongly, while those without side protection will fall below 25% in the next 3 years. Among the different types of side protection, Zip-Screens are the most popular. The three main competitors in Europe are Brustor, Pratic and Renson.

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Concrete Riding a Wave of Success

The sector for concrete fibers and concrete additives gained 3.2% in volume last year in Europe’s largest markets (Germany, France, Italy, Great Britain, Poland, and the Benelux region). Sales in the markets analyzed rose roughly EUR 68 million to reach EUR 1.26 billion. According to a study by Interconnection Consulting, annual growth in the sector is expected to hold at 3.1% through 2020.

 

All of the markets are benefiting from corporate and government bodies’ growing fondness to invest. The number one growth market is Poland. In 2017, sales volume grew 6.2%. Last year’s increase of 3.9% in the Benelux region was also above average, whereby it was the non-residential sector that registered strong gains in both the Netherlands and Belgium. The concrete fiber and additives market was also able to show significant gains (+3.2%) in France as well. In Germany (+3.1%), Great Britain (+2.9%), and Italy (+2.6%), sales remained just below the overall average.

 

Concrete Plasticizers Dominate

Plasticizers, with a share of sales of 48.6%, are the strongest product group among concrete additives, followed by superplasticizers (19.3%) and release agents (10.4%). Whereas release agents across the European markets lost heavily in shares in recent years, sales of superplasticizers grew at an above-average pace during the same period compared to the other product groups. However, with a growth of 5.1%, accelerators are expected to exhibit the greatest gains between 2016 and 2020.

 

Steel Fibers Steal the Show

Concrete fibers come in the form of steel fibers, plastic fibers, and glass fibers. By far the strongest product group is steel fibers, with a market share of 75.2%. In Germany, the supremacy of steel fibers (81.3%) is even more astonishing – and is only expected to grow. Plastic fibers capture 17.1% of European sales shares, while glass fibers are left with only 7.7% of the market, a figure that will continue to decline.

 

Poland Shows Tightest Market Concentration

Last year the top ten companies in the individual markets held the following shares of the market: Poland (71,9%), the Benelux region (66,5%), Great Britain (66,5%), Italy (64,8%), Germany (64,6%), and France (64,0%).

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To New Heights with EU Resources

The market for elastic floor coverings in the CEE countries of Poland, the Czech Republic, Slovakia, and Hungary reached a volume of EUR 221.4 million in 2017, an impressive increase of 7.9% over the previous year. In the coming years, the pace of growth is expected to slow down slightly on account of the sinking dynamics in construction. Average annual growth to 2021 will be 5.1%, according to a study by Interconnection Consulting.

Overall, the market for elastic floor coverings is benefitting from good economic developments: domestic demand is up, unemployment down, and salaries are rising. “Many projects that are also financed by EU resources will continue to contribute to the growth in the sector,” explains Katarina Gajdova, author of the study. However, due to the strong economic developments of the Visegrad Group, EU funding will be falling off by roughly 21.5% beginning in 2020.

Health Sector a Driving Force

With a market share of 17.0%, the health/medical sector represents one of the driving forces of growth on account of its heavy investment activities. In Poland, EUR 3 billion will be invested in the sector between 2014 and 2020. Hungary’s hospital infrastructure will also be extensively renovated. “Large-scale hospitals with a capacity of nearly 3,000 beds are planned for completion by 2025,” explains Gajdova. In Slovakia, the Ministry of Health has already approved EUR 153 million for the renovation of 44 hospitals. The largest area of application for elastic floor coverings, however, remains residential construction, with a market share of 36.4%.

New Trends Expected

The largest product group is heterogeneous vinyl/PVC, with a share of 42.6% in volume. The material is not only less expensive than other flooring material such as hardwood, marble, and stone, but it is also one of the less expensive materials among elastic floor coverings. However, vinyl still has many advantages, such as durability, ease of maintenance, and versatility. LVTs (Luxury Vinyl Tiles) are the fastest-growing product group, with a current market share of 18.4%. But this might not always be the case. There are indications that SPC flooring will soon take over the position as fastest growing floor covering. The reasons are the simpler installation, lower investment costs, lower material and labor costs, better waterproofing, and greater stability. And, it is better for the environment. The top five companies have a market value of 54.8%. The top companies are Amtico, Atro, Beaulieu, Gerflor, Graboplast, Fatra, Forbo, IVC, Lentex, and Tarkett.

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Elastic Floor Coverings: Sometimes Dazzling, Sometimes Matt

Three markets, three different developments. Whereas the market for elastic floor coverings in Great Britain and Ireland is in a downwards spiral on account of the Brexit crises (2017: -1.5% in volume), and is stagnating in Italy (0.3% in volume), in Spain the growth curve is rising off the charts (+3.5% in volume). These trends are also largely expected to continue, according to a study by Interconnection Consulting.

Spain Marches On

According to the study, average annual growth in Spain to 2021 will be 6.2% in volume. The favored area of application for elastic floor coverings in Spain is residential buildings, with an average market share of 27.6%, followed by health/medical with 16.9%. The leading product group in Spain is LVTs (Luxury Vinyl Tiles), with a share of 38.2%. Katarina Gajdova, author of the study, explains the advantages of LVTs: “They have a wide array of design options, can recreate the appearance of stone or wood flooring, and, compared to these materials, LVTs do not come with extensive installation and maintenance costs.” LVTs are also the fastest growing product group in Spain (average forecast growth per year to 2021: 9.1%). The market share of the top five companies is 69.4% (top 10: 76.7%).

Slow Growth in Italy

The average annual growth in Italy to 2021 will be 1.5% in volume. The largest area of application for elastic floor coverings in Italy is health/medical, with an average market share of 24.4%, followed by residential buildings with 17.3%. The dominant product group is homogenous vinyl/PVC (23.1%). Homogenous vinyl consists of one single layer, which offers the vibrancy and depth of the selected color. One layer gives the floor covering rigidity and durability. Homogenous vinyl can thereby be employed in areas with high foot traffic, explains Gajdova. LVTs are in second place, with a market share of 22.6%. As in Spain, LVTs represent the largest-growing product group and are even set to become the highest-volume product group this year. The market share of the top five companies is 62.6% (top 10: 76.6%).

Long-Term Troubles Predicted for Great Britain

Growth in Great Britain and Ireland for the upcoming years will remain at 0.3%, a stagnation largely caused by the Brexit vote. The largest area of application is in residential buildings, with an average share of 36.4%, followed by health/medical with 17.0%. Here, too, LVTs are the leading product group, with 41.8%. The second-largest group is heterogeneous vinyl, with 19.8%. In this region as well, LVTs are the group with the highest growth prospects: 2.3% annually to 2021. The market share of the top five companies is 53.6% (top ten: 76.6%).

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When there is construction, there is plaster

The plaster and mortar market shows stable development overall. The countries France (+ 1.8%), Germany (+ 2.2%) and the Netherlands (+ 1.3%) recorded moderate growth in 2017. Poland recorded the highest growth of the five markets examined (+ 8.7% in volume). All examined markets except Italy were allowed to enjoy growth in 2017 and also the outlook for the industry remains pleasing, as a new study by Interconnection Consulting shows.

 

Poland is growing fastest

Poland is the fastest growing market in all the countries surveyed. In the previous year, sales of the plaster and mortar industry increased by 8.7%. Compared to other markets, the sector in Poland has a very high share in the new building segment (83.2%), which continues to gain shares compared to the renovation sector. Above all, the construction of office and commercial buildings accelerates the growth of the industry in Poland. Nearly half of the market (47.4%) is covered by mortar. Pasty plasters come to 31.2% and mineral plasters cover 21.4% of the market

 

France in the state of rest

The French market for plaster and mortar is spurred on by a recovered construction industry. Despite the fact that the French market is very high-priced – especially compared to its neighbor Germany – the market will continue to grow at an average rate of 2.6% per year until 2021 over the next few years. Unlike Poland, the French market is driven mainly by the renovation sector (66.5%). The total market of € 1.1 billion is dominated by mortar (share: 59.4%). Pasty plasters come to 25.4% and mineral plasters to 15.2%.

 

In Italy there is a risk of dry plaster

The Italian market has a market value of € 323.1 million. The industry is struggling with lower demand due to the crisis in the construction industry and increased substitution by drywall, which has led to the market easing by 4.6% in 2017. Due to the rise of the drywalls Interconnection expects a further decline of the market until 2021. The renovation sector is the dominant segment with 64.1%. The pasty plasters have a market share of 41.9% and are thus the strongest segment. This is followed by mortars with 33.1% and mineral plasters with 25.0%.

 

In Germany, housing helps

In Germany, the market rose by 2.2% in the previous year. The market is driven primarily by new construction, which accounts for 69.7% of the total market. Housing occupies a dominant position with 86.9%. A closer look at the market reveals that there is no dominant product group. Mineral plasters account for 39.4%, followed by mortar (35.2%) and pasty plasters (25.4%). But taking the value as a starting point, it is the pasty plasters with a market share of 59.3% that account for the largest part.

 

Moderate Netherlands

The Netherlands will maintain its moderate growth in the coming years. The total market volume will amount to 1.5 million tons in 2021 with average growth of 1.5% per annum. The plaster and mortar market is being driven primarily by the new building with a share of 66.6%. Mortar is the clear number one on the Dutch market with a share of 66.6%. After that mineral plasters get 22.6% and pasty plasters with 10.8%

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China’s New Economy Cools Down Global Window Market

The global window market reached a volume of €68.8 billion in 2017, corresponding to a sales volume of 442.9 million window units and representing a growth of 2.4% over the previous year. According to a new study by Interconnection Consulting, annual sales will continue to rise by 3.3% until 2021.

China’s Bull Economy Stagnating
China is by far the largest global window market, with nearly one in three windows (30.8%) being sold there. In terms of sales volume, however, China’s market share of 15.9% is only third worldwide, lagging behind Western Europe (25.8%) and North America (21.5%). This disparity stems from China’s attempt to accomplish its massive urbanization efforts with inexpensive sash windows and simple metal frames, whereas demand in Europe, for example, is clearly for high-quality, energy-efficient windows (with a high R-value). On account of the cool down in China’s housing construction, due in part to anti-corruption measures adopted by the government, double-digit growth rates would seem to be a thing of the past. For this reason, Interconnection Consulting expects only a moderate annual growth of 2.9% up to the year 2021. By comparison, India is the region with the largest growth worldwide (+5.9%), stemming in part to gradually rising labor costs in China and South Korea, which, in turn, has resulted in a higher employment rate and increased construction activities in India.

North American Market Edging Towards Saturation
Growth in North America is expected to rise 3.3% this year, which is “already a sign of market saturation,” according to Laszlo Barla, author of the study. Market dynamics in recent years have grown increasingly weaker. In addition, the Trump administration has given rise to a degree of uncertainty among both buyers and lenders across the country. Similar growth (+3.1%) is forecast for Latin America in 2018. The most-recent economic figures have raised expectations that the national economies in South and Central America will continue to recover. Certain risks do remain, however. Certain South American currencies (the Columbia peso and the Brazilian real) are still among the most volatile in the world.

Low Interest Rates Bolster Europe’s Window Market
Not until 2015 did the Western European window market start seeing renewed growth following the heavy toll it took from the financial crisis of 2008. Currently, the region is benefitting from low lending rates, making investments in private housing construction attractive and thereby bolstering the window market. In the previous year, window sales grew 3.2%. Yet the window sector is threatened by ever-diminishing land available for construction and the concomitant rise in real estate prices. In similar developments, Eastern Europe also saw a turnaround in growth as of 2015 – though with even higher growth rates. Sales grew 6.0% in 2017. Low interest rates, rising salaries, and an efficient labor market with sinking unemployment are all factors enabling more and more people in Central and Eastern European countries to be able to afford a home of their own.

Housing Construction Gains Market Shares
Metal frames still manage to represent the highest-volume product group globally with 187.4 million units, followed by PVC windows (164.2 million units) and wood windows (73 million units). PVC windows are expected to register the largest growth in sales, with an average annual growth rate of 4.0% to the year 2021. Double-pane windows continue to be the dominant window type with a sales volume of 270 million units, followed by single-pane windows (104 million) and triple-pane windows (67.4 million units). Triple-pane windows also have the greatest growth potential (5.2% annually to 2021). In general, the share of housing construction to non-residential construction is increasing and is currently (2017) at 61.5%.

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Concrete floats on a wave of success

The industry for concrete fiber and concrete admixtures increased by 3.2% last year in the largest markets in Europe (Germany, France, Italy, Great Britain, Poland, Benelux). The turnover of the industry in the analyzed markets increased by about 68 million euros and amounted to 1.26 billion euros. By 2020, the growth of the industry should be 3.1% per year, as a study by Interconnection Consulting shows.

All markets profit from the increasing interest of companies and the state in investing. The growth market number one is Poland. In 2017, sales in the industry increased by 6.2%. The increase in the Benelux countries was also above-average in the past year, at 3.9%. Non-residential construction in particular saw a sharp increase in both the Netherlands and Belgium. In France, too, the concrete fiber and concrete admixtures market grew significantly (+ 3.2%). In Germany (+ 3.1%), Great Britain (+ 2.9%) and Italy (+ 2.6% in volume) sales were just below the overall average.

Concrete liquefier dominate

The strongest product group among concrete admixtures are the concrete plasticizers with a sales share of 48.6%. This is followed by flow agents with 19.3% and release agents with 10.4%. The latter group has lost a lot of shares in the European markets in recent years, while in the last few years the sales of plasticizer have increased above average compared to the other product groups. However, the biggest increases will be in the 2016-2020 period, with an increase of 5.1%.

Steel fibers set the tone

In the case of concrete fibers, a distinction is made between steel fibers, synthetic fibers and glass fibers. By far the strongest product group is the steel fiber with a share of 75.2%. In Germany, the advantage of steel fiber is even more striking. There, the share of steel fiber is even at 81.3% – and rising. Plastic fibers account for 17.1% of sales in Europe. Glass fibers only reach 7.7% – and the trend continues to fall.

Market concentration in Poland the strongest
The top 10 companies in the respective markets had the following shares last year: Poland (71.9%), Benelux (66.5%), United Kingdom (66.5%), Italy (64.8%), Germany (64.6%), France (64.0%).

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Fertighausproduzenten gehen mit Online-Anfragen sorglos um

Die immer wichtigere Rolle des Online-Services im Kundenkontakt hat Interconnection Consulting zum Anlass genommen die 34 marktanteilsstärksten Fertighaushersteller in Deutschland in ihrem Umgang mit Online-Anfragen zu untersuchen. Das ernüchternde Ergebnis: Im Vergleich zum Vorjahr verschlechterte sich die Reaktion der Hersteller auf die E-Mail-Anfrage gar um 1,8%, wie der Mystery-Shopping-Test zeigt.

Online wird oft stiefmütterlich behandelt

Das Potential des Internets zur Lead-Generierung wird von den Unternehmen bei Weitem nicht vollständig ausgeschöpft. Weniger als zwei Drittel (61,4%) der kontaktierten Hersteller reagierten beim ersten Online Kontakt auf die gestellte Anfrage. Nach einem Erinnerungsmail und einer telefonischen Kontaktaufnahme erhöhte sich der Anteil der antwortenden Hersteller auf 85,3%. Ein nicht zu vernachlässigender Anteil von 14,7% antwortet also gar nicht auf die dezidierten Kundenanfragen. Nur fünf der untersuchten Hersteller reagieren auf die Anfrage prompt bzw. innerhalb eines Tages (Bien Zenker, Streif, Luxhaus, Dennert, Fischer).

Aus den Augen aus dem Sinn

Insgesamt weisen die Hersteller sehr unterschiedliches Verhalten bezüglich ihres Online-Verhaltens auf. Knapp ein Drittel (29,5%) beantwortet die vier dezidierten Kundenanfragen über Garantie, Bauvorschriften, Finanzierung und Energie überhaupt nicht. Im Vorjahr lag dieser Prozentsatz noch deutlich niedriger (8,2%). Ein Drittel (31,1%) nimmt sich die Zeit alle Fragen ausführlich zu beantworten. Zusätzlich versuchen 37,7% die Interessenten mit weiteren Informationen zum Angebot in elektronischer Form zu überzeugen. Jedoch gilt für alle Produzenten nach dem Senden der Materialien einheitlich: „Aus den Augen, aus dem Sinn“. Kein einziger Hersteller, der Informationen per Post oder elektronisch zugesendet hat, erkundigte sich ein wenig später, ob es weiterhin Interesse am Angebot gäbe. „Durch die fast sorglose Bearbeitung der Anfragen gehen viele Interessenten verloren“, erklärt Viorica-Maria Jeler, Autorin der Studie. Insgesamt stellt die Studie fest, dass die Seriosität der Anfrage auch anhand der vermuteten Kundenherkunft – ob Migrationshintergrund oder nicht – bewertet wird, erklärt Jeler.

Verknüpfung mit Offline-Welt

Der Online-Kontakt wird von den Unternehmen genutzt um eine Verknüpfung zur Offline-Welt zu erstellen. Um ein Geschäft zum Abschluss zu bringen, wählen die Hersteller verschiedene Vorgangsweisen. Zwei Drittel (62,7%) schlagen ein persönliches Treffen vor, mehr als ein Drittel (27,1%) möchte ein telefonisches Gespräch führen und 10,2% geben sich mit der schriftlichen Kontaktaufnahme zufrieden.
Interconnection hat die 34 marktanteilstärksten Fertighaushersteller in Deutschland in der Studie getestet. Dazu wurden die Hersteller mit einem konkreten Anliegen zu einem Projekt kontaktiert und das Antwortverhalten analysiert.

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Parquet and real-wood flooring industry is stabilizing despite strong headwinds

Despite fierce competition from other flooring types, parquet and real wood flooring in Europe will see a 1.1% increase in sales this year, according to a new study by Interconnection Consulting.

 

Prices are increasing

The parquet and real wood flooring industry is in a challenging market environment, which also drives producers to optimize their processes and develop new strategies for their products. The most important influences for the industry are the macroeconomic effects (e.g., Brexit), construction activity, the scarcity of high quality lumber, the strong competition of other types of soil, and the demand structure of floor coverings. “Especially the last two points push the parquet and real wood floors more and more into the premium segment”, explains Jan Hudak, author of the study. This effect is also visible in the fact that sales grow much faster than sales. In 2017, the percentage increase in sales was 2.2%, while sales only increased by 1.2%. This gap is due to the price increase in this segment, according to interconnection, in the next few years further.

 

Germany is running out of steam

The largest markets for parquet and wooden floors are Germany, France and Turkey. However, especially at Europe
s largest market in Germany, the alternative floor coverings show their claws. In 2017, sales fell by 0.15% despite the construction boom. Stagnation can only be expected in the next few years. The strongest growth rates in the European market are recorded in Poland with a sales increase of 3.1% and Benelux with 3.4%. Countries such as Slovakia (2.9%), Turkey (2.7%) and Denmark (2.4%) also report healthy sales growth. Slightly less strong will be the sales growth in 2018. Only Benelux (3.4%), Poland (2.7%) and Turkey (2.0%) reach the 2% mark this year.

 

Parquet dominates

By far the largest product group with a share of 85.4% are parquet floors. In second place are the solid wooden floors with 12.1%. Accordingly, veneer floors only hold a negligible share. For the parquet floors, the strongest product group is the three-layer parquet, with long planks (40%). This is followed by the three-layer parquet with wide planks (31.8%) and the two-ply parquet with 26%. The dominating wood is still the oak with a share of 82,6%. This is followed by tropical woods with 4.0%, nut and fruit woods with 3.6% and ash with 3.3%. In Europe there are more than 160 producers of parquet and real wood floors. The top ten companies control around 48% of the total market. Important companies on the European market are Boen, Baltic Wood, Unilin, Weitzer Parquet, Hamberger, Tarkett and Parador.

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Pipe Fittings Experience Good Times

After a difficult year, the market for pipe fittings can expect robust growth rates again in the coming years. Overall, the industries sales increased by 2.3% in the top 6 European markets (Germany, Italy, France, Great Britain, Poland, Benelux). For the next few years, Interconnection Consulting expects an average annual growth of 2.0% by 2020 due to a new published study.

 

Germany sets the Tone

The largest market for pipe fittings is Germany, which shows – despite the already large volume – an above average market growth. According to the Interconnection Study, the market volume is expected to increase by 4.4% this year. Around 6.000 additional pipe connections are to be set on the market. An even stronger upward trend is expected in France, where sales are expected to increase by 4.8% this year. Italy and Poland also have good growth prospects. Only Great Britain is slowly catching up with the Brexit ghost and is likely to record declines in sales this year (-0.3%).

 

Hot & Cold Water most Popular Application Segment

The biggest application segment for pipe fittings in the examined markets are hot and cold water installations. In Italy, this segment accounts for 78.2% of the market, Germany follows on the second place with a usage of 76.0%, UK has the lowest market share of 61.3%. In contrast, the usage of radiator connection fittings is correspondingly high in the United Kingdom, with a market share of 38.5%. Italy on the other side has the lowest share of 21.2%. A niche position is taken up by the pipe fittings in the area of underfloor heating and cooling. Pipe fittings are used in Italy (59.1%) and Poland (51.0%) very often for multilayer pipes. In the United Kingdom, most pipe connections are applied for metal pipes (51.5%) and in France plastic pipes are the highest-selling segment for pipe connections (52.8%).

 

Different Competitive Landscape

Across countries, the top 10 companies achieved a market share of 41.6%. The market concentration is the highest in the Benelux countries and in Germany. Big players like Wavin (NL), Geberit (DE), Viega (DE), KME (DE) are headquartered there. By contrast, the dominance of the top companies in Italy, France and Poland is significantly lower. This is mainly because these 3 markets have a large number of local production facilities and import only a small proportion of tubes. The decline in the market share of metal pipes is causing problems for metal pipe manufacturers such as Mueller Industries (UK) and KME (DE) as PVC and multi-layers are on the rise.

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Containers Becoming Even More Popular as Makeshift Quarters

The market for container and modular building systems in five European countries (Austria, the Netherlands, Germany, Italy, and Poland) rose 5.0% (in value) in 2017, reaching a total market volume of nearly EUR 2.1 billion. According to a new study by Interconnection Consulting, the sector can expect significant growth in the coming years as well.

Containers are in. Even the Austrian parliament will now be meeting in container systems for the next three years while the country’s time-honored parliament building undergoes renovation. The complex, measuring roughly 10,000 square meters of floor space, will hold approximately 450 employees. And after it is dismantled, the innovative modular construction system is expected to be employed elsewhere as schools, kindergartens, and single-family homes. Interconnection projects an average annual growth rate of 3.6% to 2020 for container systems in the five countries studied. Sales volume is thereby expected to increase to 5.7 million square meters. Container systems will increase their annual sales by 3.4% through the 2020 planning horizon. Modular building systems are expected to increase their sales by as much as 4.2% annually, though sinking prices will cause sales volume to rise more (+4.9% annually) than revenue. For rented room systems, the projected annual sales gains is 4.7%.

Office Containers A Sure Sale

Container systems reached a sales volume of 1.24 million square meters in 2017. Office containers constituted the largest client segment in both in sales volume (36.7%) and sales revenue (36.8%). Office containers can be used for office complexes, start-up offices, administration buildings, lounges, cafeterias, branch offices, building add-ons, advertising containers, construction site offices, in-factory offices, etc. Storage and material containers are the second-largest client segment, with a market share of 25.5%. Modular systems, which can employ partitioning walls etc., reached a sales volume of 0.73 million square meters. The largest client segment in this area is residential concepts, with a share of 29.2%. Rented room systems grew last year to a volume of 3.22 million square meters. In this area as well, office space is the clear market leader with a share of 38.0%.

Rentals Trendy

The share of rentals in terms of volume was 68%. The market for container rentals grew 5.0% last year. “From an economic standpoint, buying makes sense if you’re going to use a system for roughly 18 months or more,” explains Katarina Gajdova, author of the study. Rental periods vary greatly at individual companies, ranging from just a few weeks to several years.

Poland the King of Growth

Poland witnessed the largest increase in the overall sector, with a gain in sales of 9.0%. The weakest development of the countries studied was in Italy, with a minimal increase in revenue of 0.4%. The strongest product group across all five countries was office containers. Interconnection expects this product group to see strongest growth in Austria (+4.2%) and Germany (+5.2%). In Poland, sanitation containers (+6.2%) are showing the strongest growth potential. In Italy, storage containers will see the largest growth (+1.6%), while in the Netherlands residential containers will (+4.1%).

Great Variation in Market Concentration

In 2016, market concentration by volume of the top 10 companies across all the markets studied was very low, at just 36.7%. In terms of the individual markets, Austria had the highest market concentration rate (83.7%), followed by Poland (82.8%). In Germany, market concentration was 44.8%, and in both Italy and the Netherlands the figure was 38.2%. Several important companies include Containex, Portakabin, StarCabin, und Touax.

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A Bright Future For Automatic Doors

The market for automatic door systems has slightly grown in Europe last year. Overall, the increase in turnover and sales amounted to 1.8% in 2016 and was therefore significantly higher than in previous years. This trend will continue in the coming years.  According to a study by experts from Interconnection Consulting, by 2019 an average annual growth rate of 3% per year is expected.

 

Sliding doors are the unchallenged leaders

The largest product group in all analyzed countries are automatic sliding doors, with a market share of 46.8%. The second largest group is swing doors with 31.2%. Over the next few years, these two product groups will generate disproportionate growth and will thus further increase their market shares. Revolving doors and telescopic doors are far behind, with a share of 7.3% and 7.0%, respectively.

 

Great Britain and Poland are stimulating the market

Almost all of the analyzed countries were able to achieve at least minimal growth last year. Only Italy still awaits the long-awaited boom in the construction industry, which should give construction-dependent industries a boost. This will already be the case in 2017. Interconnection expects a hefty plus (+4.9%) for Italy for the first time after years of downturn.

The growth drivers of the European market last year were Poland and Great Britain. Poland achieved a sales upturn of 4.4% in 2016. A total of 11.414 automatic doors were sold last year, of which 59.4% were sliding doors. Compared to Polish sales, British sales figures were roughly three times higher. The increase was 3.7%. Despite the political and economic uncertainty caused by Brexit, this sector is expected to continue to grow rapidly, says Marianna Svartzova, author of the study. Last year, for the first time in a year of downturn, France was able to regain a slight growth again (+1.2 in value). This moderate growth (between 1.0% and 2.0%) is also expected to continue in the coming years.

 

Moderate growth for Germany, Austria and Switzerland

With a market volume of 176.5 million Euros, the German market is by far the largest market for door automation. Last year, the German market developed very moderately (+1.5%). However, the prospects for the next few years promise higher gains. Austria’s market for tourism has stagnated in recent years (2016: sales: +0.3%). Market consolidation has led to declining average prices in recent years. Next year, the industry is expected to experience significant growth again, Interconnection Consulting experts predict. The market for automatic doors in Switzerland is almost 10% larger than in Austria. Last year, sales increased by 2.7% and the Swiss market for automatic doors will continue to maintain its high growth level in the future. A total of 54.4% of all sales in Switzerland were for sliding doors.

 

Strong distinction of market concentration

As in many other sectors, there is also a tendency towards ever-increasing market concentration in the sector of automatic doors. In the UK, the shares of the top 10 companies are the lowest (83.4%). The shares of the ten largest companies in the overall market are highest in France (93.2%). The largest companies for automatic doors across Europe are Assa Abloy, Geze, Dormakaba, Record and Gilgen.

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Finestre in Italia 2019

Percezione del mercato delle finestre italiane attraverso agevolazioni fiscali

A causa degli incentivi fiscali del governo, i quali stanno dando i suoi frutti soprattutto nel settore delle ristrutturazioni, il mercato delle finestre in Italia crescerà del 4,4% nel 2019, secondo un recente studio di Interconnection Consulting. Complessivamente, lo scorso anno il mercato delle finestre ha raggiunto un volume di 1,57 miliardi di euro. Nei prossimi tre anni, si prevede che il mercato italiano delle finestre avrà una crescita annua del 2,7%, dovuta soprattutto all’incremento nel settore delle costruzioni.
Il settore delle ristrutturazioni è particolarmente vantaggioso
Lo Stato italiano assegna alle famiglie uno sgravio fiscale del 50% in caso di ristrutturazione. Inoltre, la fiducia nel settore delle costruzioni e delle finestre è alimentata anche dalla promessa di un cosiddetto “eco-bonus”. Ciò permette alle famiglie di avere un alleggerimento fiscale del 60-65% in caso di ristrutturazione delle loro case. D’altronde il settore abitativo continua a guidare il mercato delle finestre avendo una crescita media prevista del 6,4% entro il 2022, con una quota di ristrutturazione pari all’83,8%.
Il PVC prende il comando
Nel 2017, per la prima volta in Italia sono state vendute più finestre in PVC che finestre in metallo. Sei anni prima, le vendite di finestre in PVC erano dietro a quelle di metallo e legno, che erano tradizionalmente i componenti della produzione vetraria italiana. La tendenza del 2018, nella quale vede la quota di finestre in PVC al 36,9% e il metallo solo al 30,6%, continuerà con molto probabilitá anche in futuro. Nel 2022, Interconnection stima che la quota di mercato del PVC arriverá al 40,9%, quella del metallo si abbasserá al 29,1%, e le finestre in legno si aggireranno intorno al 15,6%. “Questa tendenza è dovuta alla richiesta di materiali più economici e all’ingresso sul mercato dei produttori di finestre polacchi”, spiega Vito Graziano, autore dello studio. Mentre in altre parti dell’Europa occidentale le combinazioni stanno vivendo una ripresa, in Italia il PVC/Metallo (+ 0,9%) e Legno/Metallo (+ 1,3%) continueranno a perdere quote di mercato nel 2019, con una crescita bassa.
Fornitori dall’Europa dell’Est con prezzi più bassi
I produttori dell’Europa orientale, in particolare, beneficiano della forte domanda di finestre in PVC. L’azienda polacca Eko-Okna, entrata nel mercato europeo come un grande principiante, è cresciuta lo scorso anno di circa il 40% ed è molto ben rappresentata in Italia. L’arrivo di molti produttori dall’est ha anche abbassato i prezzi delle finestre in PVC, facendo registrare un abbassamento intorno al 2,4% nel 2018. D’altra parte, combinazioni come PVC/Metallo sperimenteranno un aumento sostanziale dei prezzi. Difatti, entro il 2022 i prezzi di questo segmento aumenteranno dell’1,6% l’anno.

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Southeast Asia Defies the US-Chinese Trade War

The market for curtain wall facades in Southeast Asia will reach a volume of $ 2.55 billion this year, which equates to a sales volume of 13.6 million square metres. In the ASEAN countries that were examined (Indonesia, Philippines, Thailand, Malaysia, Singapore and Vietnam), the curtain wall market will continue to gain momentum over the next few years. This is shown in a study conducted by Interconnection Consulting.

Urbanisation is Driving the Market

The market for curtain wall facades will increase by 6.9% per annum for a total volume of $ 3.1 billion until 2022. Progressing urbanisation, the development of the construction sector, industrialisation and regarding mainly Thailand and the Philippines tourism, are the main factors behind this sustainable growth. Indonesia and the Philippines are not only the most populous countries in the ASEAN economic area, but also the ones with the strongest growth. Vietnam is also one of the fastest-growing economies, with average growth of 6.8% annually until 2022. In this case, it is the relocation of factories from China to Vietnam that has lead to an increased demand. Malaysia, too, is showing no signs of slower growth, while Singapore and Thailand will be sluggish in the future. “According to our analysis, we can say that the ASEAN economy is currently heavily influenced by local economic development programs and the complicated dynamics of the US-China trade war,” said Vito Graziano, the author of the study.

Average Prices are Rising

As far as the materials used are concerned, the market is clearly dominated by aluminum-glass facades, with a share of 85.1%. Expert interviews show that this material remains the clear frontrunner because of its strength, durability and cost-effectiveness. Accordingly, steel and glass constructions only account for 8%. Overall, the new construction sector has a share of 85.7%, while the renovation sector hardly plays a role. Office buildings are the largest sales segment with a share of almost 30 percent. Of the three most important facade types, element facades show the biggest potential for growth, ahead  of post & beam facades and window ribbons. Although average prices have been stable in the past, they are steadily rising as a result of the US-China trade war.

 

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Severe crash, quick recovery on the market for suspended ceilings

The market for suspended ceilings in the top 7 regions of Europe (Germany, the Netherlands, Great Britain, Italy, Spain, France, Russia) experienced an abrupt fall of 10.0% this year due to the COVID 19 crisis. Interconnection’s forecast shows that market volume will not return to pre-crisis levels until 2022.

Southern Europe hit the hardest

The forecast numbers for this year are like an omen for the industry. As expected, the southern European countries are being hit the hardest by the crisis not only in terms of health but also economically. The Italian and Spanish markets for suspended ceilings plummeted by 12.0% and 12.8%, respectively. In the UK, the expected decrease amounts to 10.9% and in Russia the same figure is posited to be higher than 11.1%. In Russia, recovery will take a little longer than in the Western European countries, and therefore the market level there is expected to achieve pre-crisis levels in 2022 only.

In Rome, do as Romans do

Office buildings were the strongest area of ​​application in 2019 with a 26.5% market share, ahead of commercial applications, standing at 20%. “The COVID crisis could also lead to shifts there. For instance, owing to smart working, companies will need less office space per employee,” stated Vito Graziano, author of the report. However, there are also country-specific differences in the areas of ​​application. The share of the industry segment in Germany amounts to 23.1%, while it stays consistently below 10% in all other markets examined. In France, the healthcare sector records a disproportionately high share of 18.2%. In terms of materials, the cheap plasterboard gets the lion’s share with over a third of the total market, followed by mineral fibers and metal. An emerging material is veneer wood, which will continue to experience strong growth in the years to come in spite of the crisis. Plank ceilings represent the largest product segment with a share of 35.0%.

Strong market concentration

The market concentration varies greatly between countries. While the markets in Germany and the Netherlands are very concentrated, the markets in Italy and Spain are rather fragmented. Nevertheless, the European market for suspended ceilings is dominated by a few corporate conglomerates from Germany, France and the Benelux countries. The market share of the top 5 companies in Europe amounts to 48.6%.

 

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Dynamic economy in Southeast Asia is making a quick comeback

The market for curtain walls in the ASEAN countries (Singapore, Malaysia, Indonesia, the Philippines, Vietnam, Thailand) is bound to plummet by 9.6% this year due to the COVID-19 crisis. However, the market will recover very quickly and by 2022 will have already exceeded the pre-crisis market volume, as a new report by Interconnection Consulting shows.

Good conditions for a quick rebound

The integration of the ASEAN region into the global industrialization process, as well as into global tourism and the construction sector, offers strong impulses for the construction industry. The wave of urbanization is also a strong driver of the construction industry and is even more dominant in the ASEAN countries than in Europe or the USA. These factors are decisive for the construction industry and thus also the market for curtain walls to keep going faster than e.g. in Europe.

Vietnam benefits from the trade war

Indonesia and the Philippines are not only the most populous ASEAN countries, but also the most dynamic markets, recording an astounding growth level. Indonesia is also the largest market for curtain walls in the ASEAN region with a share of 32.5%. Vietnam benefits from the trade war between China and the United States, as many foreign factories move from China to Vietnam to avoid trade tariffs. Therefore, despite Corona, the industry growth in Vietnam will average 2.4% annually over the next few years until 2022. By contrast, while Singapore and Thailand have poorer growth prospects, Malaysia has stable growth prospects.

Smart working instead of office presence

The most important material type is reportedly aluminum glass, with a lion’s share of 84.3%. Above all, it is the cost efficiency that speaks for aluminum and against e.g. Steel / glass, which only has a market share of 8.0%. The largest application area for curtain walls is office buildings with a share of 32.8%. In contrast to many other regions, the residential sector (e.g. apartments) remains a very important segment for curtain walls in Southeast Asia at 27.2% of the total. There could also be shifts in favor of co-working spaces in the future. “There will be more smart working and it is likely that there will be less office space for the same number of employees,” stated Vito Graziano, author of the report. Furthermore, it can be expected that the new development of hotels will only progress very slowly in the next few years due to setbacks in tourism.

Downward trend in raw material prices strengthens margins

Overall, the renovation sector makes up a small chunk of the market with around 15% of the total volume. Conversely, new construction makes up for a share of 85.7%, and this trend will not change in the next few years. But the corona crisis also has immediate positive effects for producers: in the wake of the corona crisis, raw material prices are on a downward trend worldwide, which should strengthen the margins of facade manufacturers overall.

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Renovation Cushions Crisis in Garage Doors a Little

The market for garage doors in Austria has experienced an upswing in recent years. However, the Austrian construction crisis resulting from the COVID 19 crisis will also affect the market for garage doors (2020: -3.7%). A new study by Interconnection Consulting shows a slightly negative prognosis for the years after 2020.

Renovation as a Glimmer of Hope

Interconnection assumes that the market for garage doors in Austria will only grow by an average of 1.0% per year until 2023. The renovation market, however, is profitable for the major European manufacturers in Austria. After all, garage doors in Austria are changed twice as often on average as in neighbouring countries. Thanks to the crisis, the renovation segment is becoming even more important. The share of this segment rose to almost 70 percent (67.1%) of the total market during the crisis. Before the crisis, the share was around 65%.

Steel and Sectional Doors Dominate

Steel accounts for the majority of garage doors in Austria, with a share of 86.7%. Aluminium is the second most used material with 8.2%. Whereby the share of aluminium is growing particularly in the area of up-and-over and folding doors. Wood represents an elegant but also expensive niche and therefore only accounts for a share of 2.9%. 82.7% of all garage doors are sectional doors.  “This product group has proven itself to be practical and convenient for many years, and is also no more expensive than rolling and folding doors,” explains Vito Graziano, the author of the study. However, up-and-over doors will develop best after the crisis. As a result of the crisis, average prices have also fallen a little, by -1.3%.

High Market Concentration

The Austrian market is characterised by a high concentration of the top 5, with top 5 companies accounting for around four fifths of the total market. The top ranks are occupied by European players.  Domestic companies have mainly created niches in their original federal states, often by marketing their products via direct distribution. Together, however, they account for less than 15 percent of the market.

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IC Events

Vienna Window Convention

Digitalization | Sustainability | Markets

The Vienna Window Congress always looks at opportunities and challenges in the window industry. The focus is on the status quo of the European markets, as well as their trends. Especially topics around digitalization and its long and short term consequences were prominent in 2021 and will be again in 2022!

At the Vienna Window Congress, leading industry representatives will focus on innovation and success strategies. Practical approaches to solutions presented by experts in the field. In addition to the keynote lectures on an empirical basis, interactive discussions, the presentation of the WFK.Awards and an evening event will round off the event.

Detailed information on the program will soon be available here, as well as at:

www.wienerfensterkongress.at

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Vienna DOOR+GATE Convention

Märkte, Digitalisierung, Vertrieb und Technik … 

Der Wiener TÜR + TOR Kongress findet von 28. bis 29. April 2022 statt! Vorträge führender Branchenvertreter und -experten stehen im Zentrum der Veranstaltung. Interaktive Diskussionen, eine Award-Verleihung und ein Abendevent am 28.04.2022 runden das Programm ab.

Die neue Plattform mit Fokus auf Markt und Strategie richtet sich an Geschäftsführer und Entscheider in Vertrieb und Marketing von Herstellern, Zulieferbetrieben und Partnern der Branche, sowie an branchenspezifische Medien und Verbände.

Strategien | Visionen | Innovationen

Thematisch stehen 2022 folgende Punkte auf der Agenda: Der Immobiliensektor, Building Information Modeling, die Digitalisierung im Vertrieb, Smart Home, die Mitarbeiterführung und die neuesten Marktentwicklungen. Die praxisnahen Lösungsansätze zu aktuellen Themen werden in Form von Best Cases und empirischen Analysen vorgestellt.

Mehr Informationen unter www.tuerundtorkongress.at

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Leading Companies trust in Interconnection Consulting

Admonter

At the IC Impulsworkhop "Sales Optimization" we appreciate not only the practical relevance, but also the eloquent language and the perfect rhetoric. The most important benefit for our company was the sales pipeline. Adrian Capellarie (Head of Sales Admonter Holzindustrie)

Deutscher Holzfertigbau Verband

Interconnection provides us with the prefabricated house study a plausible and veritable data basis for the analysis of the actual situation in the prefabricated house market and beyond for the assessment of the future market development. We are happy to use this interpreted data for our lobbying and everyday work.

Thomas Schäfer (Managing Director, Deutscher Holzfertigbau-Verband)

ELK

The prefabricated housing study by Interconnection Consulting shows a real picture of the actual market situation and forms a valuable basis for our strategic decisions.

Gerhard Schuller (CFO ELK)

Epson

EPSON is satisfied with the Interconnection's way of communication with the market and with clients. EPSON is also appriciate the Interconnection's continuous work trying to aim the report to be at the higher level. As a result, EPSON rely on Interconnection data, for the market of POS Printers and Systems.

T.Murakami (Brand Management, Seiko Epson Corporation)

Gaulhofer

I appreciate on the forum "Impulsworkshop Vertriebsoptimierung" the practical relevance of Peter Berger linked with his practical examples. I also liked the sovereign presentation style. The most important benefit was for me, on the one hand refresh of methods and also the sales management tools that were shown. Ing. Dietmar Hammer (Head of Product Management Gaulhofer)

Kontron

The most important benefit of the Impulsworkshop "sales optimization" was in my view the procedure of the definition of strengths and the entire sales process. Mr. Berger is very competent and professional. Fabian Freund (Sales Manager, Kontron Austria)

Österreichs Personaldienstleister

The sales management tool ZAIS has become indispensable for many Austrian temporary staffing providers for fast and correct sales management decisions. A tailor-made online cockpit provides comprehensive monthly figures and data on temporary work and the labor market in Austria, while at the same time impressing with its overview and intuitive user guidance. Interconnection Consulting has consider individually to all user needs during development process and also convinces with fast response times during operation.

Dr. Gertraud Höltl (Generalsekretärin Österreichs Personal Dienstleister)

Saint Gobain

Long experience and deep understanding of the construciton industry markets make up the quality of the IC studies. Interconnection Consulting is a constant companion concerning the assessment of markets and helpful for decision-making.

Bernd Blümmers (Directeur General, Saint-Gobain Solar Systems, Central Europe, Aachen)

Salamander

Interconnection Consulting reports deliver a worthfull external perspective and are so a good contrast with regards to our internal market point of views.

Pedro Posada (CEO Salamander Industrial Products Spain)

Scandinavian Business Seating

The IC Report gives a very good overview of the Western European office furniture market, in a well-structured way. The data is helpful to better understand the market developments and drivers.

Beatrice Sotelo (Director Business Development , Scandinavian Business Seating)

Schneider Electric

Under a short time constraint, Interconnection was able to deliver an outstanding study that exceeded my expectation in terms of quality and market breadth. I highly recommend Interconnection to anyone in need of market research.

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Sodexo

When developing new market strategies, Interconnection is a trusted source we always come back to. Christian Frey (Marketing Manager CS DACH)

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