The latest Plimsoll report is available and the press release reads as follows: 

Early Warning Signs for the UK Windows & Doors Market

At a time when even the most ambivalent are starting accept that a recession will hit the UK economy in 2008. A new study by industry analysts Plimsoll Publishing has looked at how the UK slow down is already impacting on Windows & Doors market.

The analysis, to be published on the 1st of May, has drawn on the very latest figures for each of the UK’s Top 1000 companies in the windows & doors market. The headline findings offer stark reading.

  • Over a third of companies are already showing signs of recessionary behaviour, reporting declining sales. This is immediate evidence that the market is slowing down.
  • Over half of companies have seen their margins fall. Of most concern, a third of these are currently running at a loss. The pressure on sales has forced an immediate squeeze on profitability. These companies are struggling against rising costs and declining sales.
  • Over a quarter have seen an increase in their need for short term finance, a sign that costs are running ahead of cash flow. This is doubly dangerous at a time when Banks and financiers are looking hard at their loan books and therefore places these companies in an even more vulnerable position. 

As a result, as many as 1 in 6 Windows & Doors companies could disappear completely if this trend continues or deepens.

Explaining these results, David Pattison, senior analyst at Plimsoll, reports:

“We are reading every day how the credit market and the world of finance is been hit, but nonetheless I was still surprised to see just how much the Windows & Doors Market is feeling the pressure.  I hope this report is recognised as an early warning sign and managers read this and use the findings to steer a course though these tricky times.”

The analysis, is not entirely without some good news, some evidence that certain areas, particularly the small companies, with their concentration on local and domestic markets are less exposed to the slow down in the market.

I’ve got two main thoughts on this:

  • Firstly, I think Plimsoll are around 6 months late with this analysis.
  • Secondly, how are these statistics ‘early warning signs’.  Surely, we’re already deep within a window and door industry recession.

With bad news in the media every day about a housing price slump, credit crisis, and housebuilders struggling, then I’m afraid the sentiment of Plimsoll’s findings are correct. 

We’re all going to have to tighten our belts over the coming months.