04 Jan 2016

Keep your brand strong for 2016

We expected 2015 to be brilliant and it started strongly. Then the Scottish referendum and elections dampened demand and the market never really took off.

We expected 2015 to be brilliant and it started strongly. Then the Scottish referendum and elections dampened demand and the market never really took off.

The new Government said goodbye to the Green Deal, although there wasn’t much to wave at. Solar and renewables took a hammering as subsidies were removed. A third runway at Heathrow, or anywhere, moved further into the long grass, and even the CBI and Financial Times said rude things about Prime Minister Cameron. During the year we realised that climate change is triggering more violent storms and extreme rainfall and that what were supposed to be one in 100 year events, such as the Thames barrier being closed to prevent North Sea surges, are now frequent occurrences.

The Chancellor promised 400,000 houses in the next 5 years. But even if we have the capacity and skills to build them – we don’t – they won’t close the gap or keep up with the need or demand. The ONS forecasts an additional 8 million people in Britain in the next 25 years. Where will we put them?

RMI
I doubt we’ll build as many homes as we need, but RMI (Repair Maintenance and Improvement) is set for long term growth. Britain’s homes are the least energy efficient in Europe and most are in need of improvement. DIY is losing its appeal, but we are recovering our appetite for home improvement. Until this year, RMI has been near impossible to track. By a process of subtraction, it was what was left after you estimated housing and other sectors. There have never been any reliable indicators, which is why the economist from the Sunday Times invented his Skip Index. To guess the level of national RMI activity he stepped out into the street and counted the number of skips he saw!

BMBI
Working with GfK, the international research organisation, and the Builders Merchants Federation, MRA Marketing has created the BMBI (Builders Merchant Building Index) using data from GfK’s Builders Merchants Panel. GfK’s data measures sales out from generalist builders’ merchants representing over 80% of the sales of the market. The index appears monthly with a full report every quarter, tracking total sales and 12 product categories. It includes expert commentaries for a range of markets. Our first two Experts are Steve Durdant-Hollamby Managing Director of AWMS (speaking for drainage) and Andy Williamson Group Managing Director IKO plc (speaking for Roofing). We are currently talking to other potential Experts – market leaders or brands that aim to become market leaders – who wish to speak for their markets.

A scandal near you?
One other story grabbed the headlines in September and stayed there. Ever since VW admitted using illegal software in its diesel engines to cheat US emissions, it has been the news.

Eleven million cars recalled, legal action with drivers and dealerships looking for compensation, and pollution liabilities. Houston alone is claiming £66m. Estimated costs are heading towards £40bn and could even reach £100bn. That’s multiples of the value of the VW group.

Companies in construction cheat too. The BBC caught Construction Skills Certification Scheme (CSCS) test centres rigging construction safety exams. Others cheat by testing one product and selling another. Or claiming to be something they’re not. Whether it’s warm edge spacer bars, composite doors, security locks, fire doors or safety training, it’s fraudulent. And when the music stops and companies get caught, retribution can be expensive and damaging. Customers who have been promised one thing and sold another can be very unforgiving.

So overall it has been an eventful 2015! Looking ahead on a positive note, the government’s £100mn pledge to infrastructure over the next five years is good news for construction and home improvements. So we keep our fingers crossed for a more prosperous 2016!

Merry Christmas.

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