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Thermal Insulation - UK - August 2016

“Thermal insulation installers are increasingly adopting a multimeasure approach, ranging from insulation through to heating, plumbing and renewables. Companies are also branching out from the retrofit market to different new build and commercial sectors. This strategy is designed to counteract the reduced demand generated by government home energy efficiency initiatives.”
– Claudia Preedy - B2B analyst

This report addresses the following key questions concerning the thermal insulation market:

  • How has the thermal insulation market performed over the last five years?
  • How strongly will the market develop over the next five years?
  • How have changes to government initiatives affected activity in the retro-fit sector?
  • What are the drivers for market growth?
  • How have companies involved in the market faired during the last five years?

The UK thermal insulation market has demonstrated erratic development over recent years. This has been exacerbated by changes and cuts to government programmes promoting home energy efficiency measures and the UK construction sector’s stuttering recovery. The frequent changes to energy efficiency policy have resulted in a stop-start insulation market and have had a damaging effect on investor confidence in the sector.

In the UK, there are still seven million homes with inadequate loft insulation, just under five million homes have potential for cavity wall insulation, and 7.5 million solid wall homes are still uninsulated. Moreover, the Association for the Conservation of Energy (ACE) claims the UK’s housing stock is one of the least energy efficient in Europe.

This suggests significant growth potential for retro-fit installations going forward, despite current government policy pointing towards a further significant reduction in retro-fit activity over the next five years. The Conservative government has so far committed to insulate an additional one million homes during the current parliament, which represents a substantial reduction on the last five years.

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Table of contents

  1. Executive Summary

      • The market
        • Figure 1: The UK market for thermal insulation, by sector, 201115
      • New build sector to represent main driver for thermal insulation demand, while demand in the retro-fit sector is expected to remain suppressed
        • Figure 2: Forecast UK market for thermal insulation, 2016-20
      • Market factors
        • Figure 3: Construction output in Great Britain, 2011-15
        • Figure 4: Total number of Insulation measures installed under ECO and Green Deal , by region, January 2013 March 2016
      • The consumer
        • The industry
          • What we think
          • Key Insights

              • How has the UK thermal insulation market performed over the past five years?
                • How has the industry responded to volatility in the retro-fit sector?
                  • What is the outlook for the retro-fit sector? Is there still growth potential or are companies diversifying into other sectors?
                  • Introduction

                      • Definitions
                        • Methodology
                          • Abbreviations
                            • Market positioning
                            • UK Economy

                              • Overview
                                • Figure 5: UK GDP quarterly development, 2003-16
                                • Figure 6: UK GDP in economic downturns and recoveries since 1979
                              • Inflation
                                • Interest rates
                                  • House prices
                                    • Figure 7: UK House price changes, 2004-2016
                                  • Consumer spending
                                    • Manufacturing
                                      • Figure 8: UK manufacturing, 2013-16
                                    • Business investment
                                      • Figure 9: UK GFCF 2003-15
                                    • Imports
                                      • Exports
                                      • Market Factors

                                        • Key points
                                          • Market factors overview
                                            • Climate Change Act 2008
                                              • Building regulations
                                                  • Figure 10: Summary of major energy efficiency programmes since 2000
                                                • Green Deal 2013-15
                                                  • Green Deal Home Improvement Fund temporarily boosts take-up of solid wall insulation in 2015
                                                    • Warm Front
                                                      • Minimum Energy Efficiency Standards for Private Rented Sector
                                                        • Enhanced Capital Allowance Scheme
                                                          • Energy and Climate Change Committee call on government for renewed committee on tackling home energy efficiency
                                                          • Market Size

                                                            • Key points
                                                              • Market size
                                                                • Figure 11: UK market for thermal insulation, 2011-15
                                                                • Figure 12: UK market for thermal insulation, 2011-15
                                                              • Market segmentation
                                                                • Overview
                                                                  • Figure 13: Segmentation of the UK market for thermal insulation, by sector, 2011-15
                                                              • Building Thermal Insulation

                                                                • Key points
                                                                  • Market overview
                                                                    • Building regulations set out improved thermal performance standards for buildings
                                                                      • Zero carbon home plan scrapped by government in 2015
                                                                        • Government schemes promoting up-take of thermal insulation
                                                                            • Figure 14: Insulation installation under CERT, 2008-12
                                                                            • Figure 15: Key insulation measures under CERT, 2008-12
                                                                          • Frequent policy changes have damaging impact on retro-fit insulation sector
                                                                              • Figure 16: UK market for building thermal insulation, 2011-15
                                                                            • Market segmentation
                                                                                • Figure 17: UK market for building thermal insulation, by type of insulation, 2011-15
                                                                                • Figure 18: UK market for building thermal insulation, by type of insulation, 2011-15
                                                                              • Cavity wall insulation
                                                                                  • Figure 19: UK market for cavity wall insulation, 2011-15
                                                                                  • Figure 20: UK market for cavity wall insulation, 2011-15
                                                                                • Loft insulation
                                                                                    • Figure 21: UK market for loft insulation, 2011-15
                                                                                    • Figure 22: UK market for loft insulation, 2011-15
                                                                                  • Draught proofing
                                                                                      • Figure 23: UK market for draught proofing, 2011-15
                                                                                    • Roof insulation
                                                                                      • Figure 24: UK market for roof insulation, 2011-15
                                                                                    • External wall insulation
                                                                                      • Impact of government schemes on solid wall insulation uptake
                                                                                        • Green Deal Home Improvement Fund provides much needed - albeit temporary - boost to solid wall insulation sector in 2014 and 2015
                                                                                          • Trade association calls on government to deliver coherent energy efficiency strategy
                                                                                            • Figure 25: UK market for external wall insulation, 2011-15
                                                                                          • Internal wall insulation
                                                                                            • Figure 26: UK market for internal wall insulation, 2011-15
                                                                                          • Pipe & cylinder lagging
                                                                                            • Figure 27: UK market for pipe & cylinder lagging, 2011-15
                                                                                          • Floor insulation
                                                                                            • Figure 28: UK market for floor insulation, 2011-15
                                                                                        • Industrial Thermal Insulation

                                                                                          • Key points
                                                                                            • Market overview
                                                                                                • Figure 29: UK market for industrial thermal insulation, 2011-15
                                                                                                • Figure 30: UK market for industrial thermal insulation, by material, 2015
                                                                                                • Figure 31: UK market for industrial thermal insulation, by type, 2015
                                                                                                • Figure 32: UK market for industrial thermal insulation, by end use sector, 2015
                                                                                            • Regional Analysis

                                                                                              • Key points
                                                                                                • Figure 33: Insulation measures installed under Green Deal and ECO, by region, January 2013-March 2016
                                                                                                • Figure 34: Total number of insulation measures installed under ECO and Green Deal , by region, January 2013- March 2016
                                                                                              • Regional construction output
                                                                                                • Figure 35: Regional private housing construction output, 2011-15
                                                                                                • Figure 36: Regional public housing construction output, 2011-15
                                                                                                • Figure 37: Regional public non-residential construction output, 2011-15
                                                                                                • Figure 38: Regional private industrial construction output, 2011-15
                                                                                                • Figure 39: Regional private commercial construction output, 2011-15
                                                                                                • Figure 40: Regional housing repair & maintenance output, 2011-15
                                                                                                • Figure 41: Regional public non-residential repair & maintenance output, 2011-15
                                                                                                • Figure 42: Regional private non-residential repair & maintenance output, 2011-15
                                                                                                • Figure 43: Manufacturing businesses in the UK, by region, 2015
                                                                                            • Seasonality of Sales

                                                                                              • Key points
                                                                                                • Seasonality of construction output
                                                                                                  • Figure 44: Seasonality of public housing output, 2011-15
                                                                                                  • Figure 45: Seasonality of private housing output, 2011-15
                                                                                                  • Figure 46: Seasonality of public non-residential construction output, 2011-15
                                                                                                  • Figure 47: Seasonality of private industrial construction output, 201115
                                                                                                  • Figure 48: Seasonality of private commercial construction output, 201115
                                                                                                  • Figure 49: Seasonality of public housing repair & maintenance output, 2011-15
                                                                                                  • Figure 50: Seasonality of private housing repair & maintenance output, 2011-15
                                                                                                  • Figure 51: Seasonality of public non-residential repair & maintenance output, 2011-15
                                                                                                  • Figure 52: Seasonality of private non-residential repair & maintenance output, 201115
                                                                                              • Market Trends

                                                                                                • Key points
                                                                                                  • Building sector trends
                                                                                                      • Figure 53: Residential property transactions in the UK, 2011-15
                                                                                                      • Figure 54: House Type in Total New Housing Builds in UK, 2011-15 (% of Total)
                                                                                                    • CERT/CESP/ECO/Green Deal
                                                                                                      • Figure 55: Number of main insulation measures under supplier obligations, by obligation, 2002-2012 and forecast 2012-2022
                                                                                                    • CERT programme
                                                                                                        • Figure 56: Number of insulation measures under CERT, by year 2008-12
                                                                                                      • CESP programme
                                                                                                        • Figure 57: Number of insulation measures under CESP, 2009-2012
                                                                                                        • Figure 58: Insulation measures under CESP, 2009-2012
                                                                                                      • ECO programme
                                                                                                          • Figure 59: Number of ECO measures installed, by obligation and month, January 2013-May 2016
                                                                                                          • Figure 60: Number of insulation ECO measures installed, by obligation, January 2013 to May 2016
                                                                                                          • Figure 61: Key insulation ECO measures installed, by obligation, January 2013 to May 2016
                                                                                                        • The Green Deal
                                                                                                            • Figure 62: Number of Green Deal Plans in unique properties, May 2013 to May 2016
                                                                                                            • Figure 63: Number of green deal assessments undertaken and measures installed, by month, January 2013- May 2016
                                                                                                            • Figure 64: Number and Value of Green Deal Cashback Vouchers, by Month, February 2013 - September 2014
                                                                                                            • Figure 65: Number and Value of Green Deal Home Improvement Fund Vouchers, by Month, April 2014 - June 2016
                                                                                                        • Distribution

                                                                                                          • Key points
                                                                                                          • Supply Sources

                                                                                                            • Key points
                                                                                                              • Production
                                                                                                                • Overview
                                                                                                                  • Figure 66: UK production of selected thermal insulation materials, 2011-15
                                                                                                                • Segmentation
                                                                                                                  • Figure 67: Segmentation of the UK production of selected thermal insulation materials, by material, 2015
                                                                                                                  • Figure 68: Segmentation of the UK production of selected thermal insulation materials, by material, 2011-15
                                                                                                                • Imports
                                                                                                                  • Overview
                                                                                                                    • Figure 69: UK imports of selected thermal insulation materials, 2011-16
                                                                                                                  • Segmentation
                                                                                                                    • Figure 70: Segmentation of UK imports of selected thermal insulation materials, by material, 2011-16
                                                                                                                  • Exports
                                                                                                                    • Overview
                                                                                                                      • Figure 71: UK exports of selected thermal insulation materials, 2011-16
                                                                                                                    • Segmentation
                                                                                                                      • Figure 72: Segmentation of UK exports of thermal insulation materials, by material, 2011-15
                                                                                                                    • Trade surplus/deficit
                                                                                                                      • Figure 73: UK trade surplus/deficit in thermal insulation materials, by material, 2011-16
                                                                                                                  • The Consumers – Usage and Future Intentions

                                                                                                                    • Key points
                                                                                                                      • Cavity wall and loft insulation remain most popular thermal insulation measures installed in the last two years
                                                                                                                          • Figure 74: Type of thermal insulation measures installed in users’ homes over the last two year, May 2016
                                                                                                                        • Two-thirds of homeowners are not looking to install thermal insulation measures over the next two years
                                                                                                                          • Figure 75: Measures considered for installing thermal insulation in the next two years, May 2016
                                                                                                                      • The Consumer – Installation Motivations

                                                                                                                        • Key points
                                                                                                                          • Wanting a warmer home is key driver for thermal insulation installation, ahead of cost savings on energy bills
                                                                                                                            • Figure 76: Reasons for thermal insulation installation, May 2016
                                                                                                                        • The Consumer – Attitudes towards Home Energy Efficiency Measures

                                                                                                                          • Key points
                                                                                                                            • The majority of homeowners (65%) are well informed about the benefits of thermal insulation
                                                                                                                              • Figure 77: Attitudes towards home energy efficiency measures and thermal insulation, May 2016
                                                                                                                            • Majority of homeowners consider installing home energy efficiency measures other than insulation - new opportunities for thermal insulation industry?
                                                                                                                              • A quarter of homeowners plan to undertake major home improvement work over the next two years
                                                                                                                                • 39% of homeowners don’t mind paying a bit extra on their energy bill if it means the government can use subsidies/grants to help people make their homes more energy efficient
                                                                                                                                • Industry Structure

                                                                                                                                  • Key points
                                                                                                                                    • Industry development
                                                                                                                                      • Figure 78: Analysis of the changes in the other non-metallic mineral products manufacturing industry, 2011-15
                                                                                                                                      • Figure 79: Analysis of the changes in the glass fibres manufacturing industry, 2011-15
                                                                                                                                    • Structure by employment
                                                                                                                                        • Figure 80: Analysis of the employment structure of the other non-metallic mineral products manufacturing industry, 2014 and 2015
                                                                                                                                        • Figure 81: Analysis of the employment structure of the glass fibres manufacturing industry, 2014 and 2015
                                                                                                                                      • Structure by turnover
                                                                                                                                        • Figure 82: Analysis of the financial structure of the other non-metallic mineral products manufacturing industry, 2014 and 2015
                                                                                                                                        • Figure 83: Analysis of the financial structure of the glass fibres manufacturing industry, 2014 and 2015
                                                                                                                                    • Company Profiles

                                                                                                                                      • Cape

                                                                                                                                          • Recent acquisitions
                                                                                                                                            • Company strategy and outlook
                                                                                                                                              • Figure 84: Financial Analysis of Cape, 2011-15
                                                                                                                                          • Celotex

                                                                                                                                              • Company outlook:
                                                                                                                                                • Figure 85: Financial analysis of Celotex, 2010-14
                                                                                                                                            • Encon Insulation

                                                                                                                                                • Company outlook:
                                                                                                                                                  • Figure 86: Financial analysis of Encon Insulation, 2011-15
                                                                                                                                              • Kingspan Insulation

                                                                                                                                                  • Company performance
                                                                                                                                                    • Figure 87: Financial analysis of Kingspan Insulation, 2010-14
                                                                                                                                                • Knauf Insulation

                                                                                                                                                      • Figure 88: Financial analysis of Knauf Insulation, 2010-14
                                                                                                                                                  • Rockwood

                                                                                                                                                      • Figure 89: Financial analysis of Rockwool, 2010-14
                                                                                                                                                  • SIG

                                                                                                                                                      • Company strategy:
                                                                                                                                                        • Company performance:
                                                                                                                                                          • Figure 90: Financial analysis of SIG, 2011-15
                                                                                                                                                      • Springvale EPS

                                                                                                                                                          • Figure 91: Financial analysis of Springvale EPS, 2011-15
                                                                                                                                                      • Superglass Insulation

                                                                                                                                                          • Company strategy:
                                                                                                                                                            • Superglass to be acquired by Inflection, part of Russian TechnoNICOL Group
                                                                                                                                                              • Figure 92: Financial analysis of Superglass Insulation, 2011-15
                                                                                                                                                          • Jablite

                                                                                                                                                                • Figure 93: Financial analysis of Jablite, 2010-14
                                                                                                                                                            • Isover Saint-Gobain

                                                                                                                                                              • Demand Structure

                                                                                                                                                                • Key points
                                                                                                                                                                  • Building
                                                                                                                                                                    • Figure 94: Construction output in Great Britain, by Type, 201115
                                                                                                                                                                  • Heating and ventilation
                                                                                                                                                                    • Process plant
                                                                                                                                                                    • Forecast

                                                                                                                                                                      • Key points
                                                                                                                                                                        • Market size
                                                                                                                                                                          • Construction forecast
                                                                                                                                                                              • Figure 95: Forecast construction output in Great Britain, 2016-20
                                                                                                                                                                              • Figure 96: Forecast construction output in Great Britain, 2016-20
                                                                                                                                                                              • Figure 97: Forecast construction output in Great Britain, 2016-20
                                                                                                                                                                            • Housing construction forecast
                                                                                                                                                                              • Figure 98: Forecast private housing output in Great Britain, 201620
                                                                                                                                                                              • Figure 99: Forecast public housing output in Great Britain, 2016-20
                                                                                                                                                                            • Thermal insulation market forecast
                                                                                                                                                                              • Figure 100: Forecast UK market for thermal insulation, 2016-20
                                                                                                                                                                              • Figure 101: Forecast UK market for thermal insulation, 2016-20
                                                                                                                                                                            • Market Segmentation
                                                                                                                                                                              • Figure 102: Forecast segmentation of the UK market for thermal insulation, by sector, 2016-20
                                                                                                                                                                            • Outlook for thermal insulation sector remains uncertain due to cut backs to energy efficiency schemes and lack of clear long-term government policy
                                                                                                                                                                              • Demand for retro-fit installations set to further fall under new supplier obligation to replace ECO in 2018
                                                                                                                                                                                • New build expected to show stronger growth than retro-fit...
                                                                                                                                                                                  • ...But growth potential for retro-fit installations still exists
                                                                                                                                                                                    • Committee on Climate Change calls for clear, consistent and credible policies to drive building energy efficiency
                                                                                                                                                                                        • Figure 103: Forecast for UK market for building thermal insulation, by type, 2016-20
                                                                                                                                                                                        • Figure 104: Forecast for UK market for building thermal insulation, by type, 2016-20
                                                                                                                                                                                      • Industry
                                                                                                                                                                                      • Further Sources & Contacts

                                                                                                                                                                                        • Trade associations

                                                                                                                                                                                        Companies Covered

                                                                                                                                                                                        To learn more about the companies covered in this report please contact us.

                                                                                                                                                                                        Thermal Insulation - UK - August 2016

                                                                                                                                                                                        £1,495.00 (Excl.Tax)