From fluctuating inflation and challenging market conditions to increased sustainability regulations, 2023 is looking to be a demanding year for those supplying the house building and renovation industries. Andy Dennis, Sales Director at Swish, considers the impact inflation, changing regulations and market unease is having and how Swish is working hard to provide its distributors and merchants with the tools they need to face these challenges head on:
"2023 follows three exceptional years of increased demand and a period of rising prices driven by raw material and the energy markets. The new homes sector is a key driver for our market, and years of demand outstripping supply, fuelled by mortgage discount schemes, have seen a year-on-year growth. However, 2023 is seeing this market slow down, as rising mortgage rates are resulting in many people staying put and renovating their existing homes rather than buying a new one.
"This 'improve don't move' trend is the result of a lack of confidence in the end user, which in turn has caused the market to contract and slow demand. However, there is still a requirement for product from housebuilders and homeowners, albeit slightly reduced, and it is this unpredictable and changeable market that can cause difficulties for distributors and merchants."
"A major challenge faced by distributors is the management of their inventories. Ensuring you have the right stock at the right time can be extremely difficult when installers workload is slow, and their distributors are expected to be agile and responsive.
"Here at Swish we understand this challenge, which is why we maintain a twice weekly delivery service to all our account holders enabling them to better manage their inventories, both in the short and long term. We can provide this service due to our ability to hold a large amount of stock, which allows us to offer short lead times and be more proactive in terms of responding to the market.
"Another way we can support the market is to communicate directly with the house builders. For example, the tightening of the Part L regulations mean house builders need to find different means of improving insulation and sustainability by producing 31% less carbon than the existing standard. One method is to add more insulation to the roof, which can result in a change in height of the fascia. By working closely with developers and discussing how we, as a manufacturer, can provide house builders with the technical support and advice they need, we are ensuring the entire supply chain is prepared and ready to deliver, as and when required."
"In addition to inventory and supply chain challenges, distributors and merchants are also facing rising costs. After a period of exponential price increases, the expectation in 2023 is for improved stability, although issues affecting raw material costs have been unprecedented in recent years.
"Living with costs at a new level and with pricing uncertainty can be a challenge. We understand the need for fixed price contracts, not only to protect new work but also to offer confidence to the end customer.
"Here at Swish we are looking at ways we can mitigate the impact of price increases. By understanding that the environment in which we operate is changing with regards to inflation, we are better able to 'sense check' our decisions to offer our customers an improved stability."
"In addition to pricing and stocking, we know that sustainability will be a key consideration for house builders going forward in 2023. As more stringent regulations are introduced, both in terms of creating more sustainable, efficient buildings as well as the types of products being used, our customers will be looking more closely at how their stock is produced.
"We have always worked to be as green as possible, for example we reuse water, and have a 'zero waste to landfill' policy. However, we have never been able to use much recycled material in our products due to a lack of waste in our manufacturing processes. This is now due to change thanks to our ability to buy in recycled plastics which can be added to our own materials to make our products. Although this is not a cheap option, it's an incredibly sustainable one, as we can use materials from myriad industries, creating a circular economy. Legislation is only going one way with regards to sustainability, and we want to be able to demonstrate that we are doing all we can to lead the sustainability challenge.
"Whilst there remains some concern about the market activity levels in 2023, we're confident it will remain resilient. We will continue to support our customers by providing a stable approach to product and price management, offer industry leading technical support and help overcome any challenges that come their way this year."