The great uncertainty surrounding Brexit caused a 2.1 percent sales decrease in the window industry in the UK & Ireland area. By contrast, the window market in southern Europe (Italy, Spain, Portugal) will continue to recover and will be Europe’s driving force for growth at a sales increase of 6.8 percent in 2019.
The largest markets, France & Benelux and the German-speaking DACH region, however, will continue to achieve moderate growth rates of 1.6 percent and 1.9 percent in 2019, respectively. In these countries, the main factor curbing growth is restrained housing construction. The Scandinavian countries are also suffering from the poor development in residential construction; the window market in northern Europe will decline by 1.5 percent in 2019.
The worst development among Scandinavian countries is expected in Sweden. Overall, sales in Western Europe will increase from 19.1 million units to 19.7 million units by 2022 (CAGR 0.8 percent), with Italy, Spain and Portugal making a major contribution to growth; both in the new construction sector and in the renovation segment.
Metal Windows Dominate Sales
Metal windows generate the largest turnover. In 2019, sales in this segment should amount to 6.8 billion EUR. The average growth of this segment per year will be around 3.2 percent until 2022. The reason for the consistently high growth rates is the low cost of maintenance and the optical appeal of aluminium, according to Laszlo Barla, the author of the study.
PVC has the largest share of sales at 43.0 percent, with an annual growth of 1.7 percent. Growth in this segment will continue, thanks in particular to rising demand in the southern European countries. Overall, combinations show the highest growth rates. For example, wood-aluminium will grow by an average of 2.6 percent and PVC-aluminium by an average of 3.5 percent annually until 2022. Both material groups combine the advantages of the aluminium look with the comfort of wood or the easy care of PVC.
Structural Change Due to the Advance of Eastern European Window Manufacturers
The residential construction sector is the most important sector in the window industry at 66.3 percent. Interconnection expects a moderate increase in this area until 2022 (CAGR: 1.4 percent). The increase is mainly thanks to the renovation sector, which continues to perform well due to increased environmental requirements.
The industry is undergoing a major structural change due to increased internationalization. Companies from the Eastern European countries Poland, Slovakia or Romania are gradually conquering the Western European markets.
The import ratio in Germany now stands at 28.8 percent in the sales area. On the other hand, we can see that Poland has an export share of 56.0 percent and with players such as Drutex, Eko-Okna and Oknoplast among others, will stir up the top 10 in some Western European countries. But not only Polish brands are on the rise: HSF and Slovaktual from Slovakia, are targeting German-speaking countries in particular, and Casa Noastra (brand Q-Fort) from Romania are exporting to Italy and France.
Some major Western European manufacturers have shares in these companies and can thus benefit from this boom, others must devise clear strategies for differentiation, in order to defend market shares.
For more information: www.interconnectionconsulting.com.