More work for builders in 2015, but will their profit margins show it?
Published: 17 March, 2015
A survey by LB Roof Windows asked 12,000 installers and builders whether they think the future is bright for their profit margins.
According to the Institute of Financial Studies (IFS), average household incomes are now back to where they were before the financial crisis. With such positive signs for the UK economy, LB Roof Windows, a supplier of roof windows and roof domes for the building sector, wanted to know how companies in the industry think the current situation will impact their activity.
To this end, LB Roof Windows teamed up with building industry data specialist, Insight Data, to email 12,000 builders and installers with a number of questions. The results are encouraging, but are companies prepared to fully capitalise on the growing market?
Asked what their expectations for their businesses are in 2015, the majority of respondents were overwhelmingly positive, with over 54% stating they're expecting the number of projects to increase considerably this year, and over 37% anticipating they'll be a little busier than in 2014.
However, despite their expectations for a higher volume of work, building companies are a little less optimistic regarding profit margins. Only a third think these will be much better in 2015 compared to last year, whereas half of the respondents believe their profit will only be "slightly better" than in 2014.
LB Roof Windows sales director, Adrian Cooper, said: "Although the market is on the rise, builders feel pressurised to keep their prices down in order to maintain their competitive edge. This trend is highlighted by their expectations for 2015, which show that even if there is more work available, this is not 100% reflected in their profit margins."
The survey also shows that most companies (75%) expect the price of materials and home improvement products to increase to a certain extent this year.
Mr Cooper added: "One solution is to focus on building materials and home improvement products that deliver better value for money. An example is our Aurora Roof Window, which is becoming increasingly popular as a more competitively priced alternative to the well-known Velux brand, while delivering similar benefits. Aurora Roof Windows are helping more and more trade customers protect their margins, and keeping homeowners happy."