4 minute read
Comment Piece
THE BENEFIT OF HINDSIGHT
Has 2022 panned out as expected? The straight answer is no, I don’t think any one of us could have anticipated what would happen as the year unfolded. As Covid was starting to retreat, Putin was doing the opposite. His relentless attack on Ukraine has had a devastating impact on both a human and business level, sending energy prices through the roof and, with it, anxiety over the cost of living. Then, just when we thought it couldn’t get much worse, our own Government sent the markets into a tailspin with the erroneously named ‘mini budget’, that was anything but. All this, and I’ve not even mentioned our own industry yet.
Earlier this year, in the Glass News New Year edition, I said “I think we’re in for a challenging 2022 – household disposable income will very likely shrink as a result of inflation, interest rates and taxation, and where there’s a drop in disposable income, there will be a drop in spending”. In fact, the one surprise is that the forecast downturn in the market for this year, does not appear to have happened yet. Some are reporting a slowdown, others are as busy as ever. Although I’m a pragmatist, even I was underplaying what we now know, with the benefit of hindsight. The only point I didn’t raise eleven months ago was the spectre of recession but, by the time you read this, that might have changed too. The issues with which we started the year have not dissipated. Supply and delivery remain an industry issue, not least the rapidly increasing cost of goods from overseas, as well as scarcity of skilled labour and international trading conditions. Never before has it been so important not to be over reliant on imported goods, particularly given the state of the pound against other currencies. Unless you’re an exporter, of course, in which case this could be the window to grow your markets. And never before has it been so important to have certainty in your supply chain, giving customers the confidence in delivery and quality they deserve. No prizes then, for guessing what much of the conversation was focussed on at FIT Show, back in May. While there seemed to be fewer people walking the aisles, it was still great to feel the buzz again. We attended as Solar Calibre, our composite door business, with a major focus on quality products backed by top customer service and distribution. Solar Calibre has received a lot of interest in its higher end products and, inevitably, it will be these products that offer the differentiation needed to maintain margins. I believe this will continue to be the theme for 2023. Businesses must look to keep their costs under control and to a minimum. If they can spend time seeking out the sales opportunities that will provide high margins and a profitable return, they might just ride out the storm. Looking at this from a more positive perspective, the feared slowdown in the housing market will very likely inspire homeowners to improve rather than move, which has its benefits for our industry. And, with 2023 on the horizon and no sign of the energy crisis abating, there is the possibility that this will encourage the market, as other commentators have also noted. We are all consumers and we are all exploring how we can most effectively use and retain energy. Added to this is another top driver, the impact of digitalisation which makes home working far more feasible for many, who will again want to make sure their homes are as energy efficient as possible. For those who haven’t already looked at replacing their doors and windows, now is the time to encourage the homeowners who do still have some disposable income. Our industry has excellent products that can help them really make a difference and, while the outlay can be significant, the return on investment will be notable versus the cost of electricity and gas, in the coming months and probably years. We’ve sought out 2023 industry forecasts but, in truth, you have to ask if they’re realistic when so much remains up in the air for our economy. At the time of writing the Glazing Summit is approaching which will hopefully bring a consensus on what our industry believes will happen over the next 6 to 12 months. I’ve outlined the main focus points, as I see them: minimise reliance on imported products, keep a steady eye on the supply chain and work hard on high end products with good margins. It may also pay not to be overly reliant on the trade and domestic market. The Solar Fabrications group of businesses are in a strong position, but we don’t rest on our laurels. We hold our nerve, keep a clear collective head and wait for the next thing, alongside everyone else.
