Clearview South January 2014 - Issue 146 - Page 60

HARDWARE&SECURITY MESSAGES FROM BRUSSELS Just as predicted by Roto last year, 2013 has been a tough year in relevant markets and neither is “much good to be expected” in 2014. That given, the company will keep to its current strategy for the year ahead – “defy market trends, play to our strengths and consolidate our economic stability, so as to remain the first choice for customers”. Basically, Roto intends to “stay on the track to success”, explained the management board at the 8th International Trade Press Day, at the end of November in Brussels, an event attended by some 60 journalists from 18 countries. Widespread economic weakness “When assessing general economic trends and the outlook for the industry, we did ourselves a favour in as much as we didn’t buy into official attempts to talk up the market, nor did we try reading tea leaves, which is what research institutes seem to do,” Dr. Eckhard Keill, Roto Frank AG CEO said. He asserts that the present situation has justified his caution: international window and door markets have been strongly affected in 2013. Despite this, Roto Group h as been able to stand its ground and consolidate its position at a high level, so reaching some “ambitious targets”. The prognoses for 2014 point in the same direction. According to a recent United Nations report, global economic growth will reach only 2% in 2013. In his analysis, Keill focused on specific regions: in Latin America previously strong growth is expected to slow to 3%, while the 60 JAN 2014 European economy will continue to suffer from the prevailing debt crisis. According to an International Monetary Fund (IMF) forecast, the BRIC (Brazil, Russia, India and China) states economic “boom is over”. Admittedly, there is some positive news: the USA is emerging from recession and Germany remains the driving force for the European economy. However, Keill is concerned that the “generosity” displayed by CDU/ CSU and SPD in their ongoing coalition talks will jeopardise Germany’s economical competitiveness. The overall global economic outlook for 2014 is slightly more positive, but risks remain. The Roto CEO warned of unresolved finance and debt crises around the world, the global money glut and the policy of extremely low interest rates, any of which might turn out to be time bombs. The recovery that keeps everyone waiting The slump in the European building industry has continued during 2013. Overall construction volumes in the 19 Euroconstruct countries have dropped to 1.3 billion Euro, their lowest point since 1993. Residential construction has also hit a 20-year low, with completion planned for only 1.3 million homes. Germany is almost the only bright spot. Euroconstruct predicts that the “construction industry recovery, which has been repeatedly delayed over the last couple of years,” will finally make an appearance by 2015. Residential construction, while not strong, will make the best showing. As in the past, trends will vary across regions and if the research institutes are right, the winners will be Scandinavia, the United Kingdom and Germany; while Spain, Portugal, Italy, Czech Republic and Hungary will continue to struggle. Residential construction will also be the driving force behind the building industry’s recovery in Germany, with the redevelopment/ renovation segment clearly dominating ahead of new build. Increased immigration, solid employment figures, real estate as a safe investment and low interest rates will stimulate present and future trends. Unpredictability and doubts Window and door markets are, as always, a mirror image of general business trends in the construction industry, including regional and national disparities. For 2013, CEO Keill predicted a slump of 8 – 10% on average in all Roto-relevant markets. The outlook for 2014: markets will remain weak in general, but market contraction will be less dramatic than this year. Accurate forecasting is further complicated by the fact that some markets are “absolutely unpredictable”, a good example being Russia. Referring to Germany Roto doubts the results of the latest survey of the Window Associations. In particular, the increase in units by almost 6% to 13.9 million window units in 2014, alongside a constant material share, seems “unrealistic”. Roto’s own experience shows that while the trend towards more expensive (energy-saving) windows does produce better figures, the hardware industry derives hardly any of the benefit. The same is true for the positive forecast for entrance doors with an estimated increase of 6% to 1.4 million doors. According to Keill “this optimism about an increase in door units does not seem well-founded”. To read more, visit www.clearview-uk.com