Carl Arntzen: less of a decline.

Heating sector faces hard times

Published:  20 May, 2009

LONDON: One of the leaders of the UK's heating industry told a media briefing yesterday that the first tentative signs of economic recovery are becoming visible. He forecast a return to normal levels of activity by early 2011.


Carl Arntzen, director, Bosch Thermotechnology, who has overall responsibility for the Worcester, Bosch Group and Buderus brands in the UK market, told journalists: "The market decline accelerated in January and February, but we are seeing the first signs that the decline is slowing.

"Many installers that I have spoken to have reported that activity has increased in recent weeks, particularly in the social housing sector which has entered the new financial year."

Mr Arntzen added that domestic boiler sales have drastically declined in recent months. "The newbuild market has been severely cut back, which has impacted on many manufacturers. We are fortunate, at Worcester, Bosch Group, in that we are not heavily exposed to this sector, which means that it has been much more business as usual for us."

He believes that consumer confidence will play a key role in recovery. "I wouldn't like to call the bottom of the market, but there are early signs that consumer confidence is returning, particularly in the housing market.

"Hopefully, this will give some uplift to the one-off market and we are hopeful that the home improvement market, which has been energised by people staying in their own homes for longer, will also provide opportunities. However, confidence remains fragile and could be severely impacted by macro-economic factors which are beyond the heating sector's control."

The full impact of the fiscal stimulus being injected into the UK economy, from unprecedented low interest rates and the VAT cut, will take time to work through, he added.

"We are hopeful of seeing real signs of recovery in Q3 and Q4 of this year, but expect the full year to be approximately 11% down.

"In 2010, we will see slow, steady improvement, with a return to normal levels of activity hopefully in 2011."

He added that the rejuvenated market will be a changed one. "We anticipate an increased uptake in renewable heating solutions as the market returns to growth, which will radically change the dynamics and mix of the UK heating market."

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