The Flat Glass Manufacturing industry is expected to return to consistent growth over the five years through 2018-19 as the UK economy undergoes a tentative recovery, and conditions in key downstream construction and automobile industries improve. For these reasons, industry research firm IBISWorld has updated its report on the Flat Glass Manufacturing industry.
Flat glass is integral to the construction of most buildings and transport vehicles, and is an important component for some appliances and furnishings. The Flat Glass Manufacturing industry produces float, rolled, drawn and blown flat glass sheets that are sold to downstream industries for further fabrication or to end users in the building market.
The wide variety of uses for glass has made it an important input in many other industries. According to IBISWorld industry analyst Christopher Edwards, “the two most significant downstream industries for flat glass manufacturers are construction and automobile manufacturing and as both of these industries are highly cyclical, flat glass manufacturers have not performed particularly well over the five years through 2013-14”. Over the period, revenue is estimated to grow at a compound annual rate of just 1.1%. In the current year, it is projected to fall by 4.8% to GBP 316 million. This has been the result of construction and automobile manufacturing activity declining after the onset of recession in 2008-09. Both markets have largely stagnated since, except when construction briefly rebounded in 2009-10.
The domestic industry is dominated by three global players in the glass products industry: Pilkington, Saint-Gobain Glass and Guardian Industries. Together, these three companies make over 95% of the flat glass manufactured in the UK. The high levels of capital investment needed to enter the market prevent further competitors from entering the industry.
Edwards adds, “the Flat Glass Manufacturing industry is expected to return to consistent growth over the five years through 2018-19 as the UK economy undergoes a tentative recovery, and conditions in the construction and automobile industries improve”. Although revenue is projected to contract marginally in 2014-15, the industry is expected to recover in line with the economy in general thereafter, assuming no further exogenous macroeconomic shocks.