Boiler sales figures for 2013 indicate that the UK heating and hot water industry’s recovery is well underway, according to Carl Arntzen, managing director at Worcester, Bosch Group.
Mr Arntzen said: “Having seen signs of small-scale growth towards the end of 2012, this year has undoubtedly followed suit. Outside of the usual slow start in January, every month has been positive in terms of boiler sales compared to last year. Now, after nine months of successive growth for the market, it is important that we collectively hold the belief that these are real signs of some full-scale recovery.
“When the most recent industry figures were released in September, the boiler market was up 16% on the same period of 2012, which is hugely encouraging. In terms of figures, the first nine months of 2012 saw 990,000 boilers sold, compared with 1,150,000 in the same period this year – which is a huge increase of some 160,000 boilers.
Mr Arntzen attributes the large-scale growth of boilers sales to two key factors – the introduction of the Energy Company Obligation (ECO), and the government’s support for the property market.
He added: “Without question, one of the main drivers of this growth has been the ECO scheme, which accounted for some 61,000 new boiler registrations between January and August. While this may be considered a success, we mustn’t lose sight of the need to maintain high standards of installation to ensure sales which are perhaps not hugely profitable don’t result in corners being cut with installation work.
“Another factor to have prompted increased sales is the recovering property market. The government's help to buy schemes have definitely stimulated some activity around the newbuild sector, and houses are starting to sell. Consequently, there has been an uplift in demand for heating and hot water systems, which is great news for our industry.”
Mr Arntzen continued: “What we need to ensure now is that we don’t see a boom and bust scenario, as we’ve arguably seen with Feed-in Tariffs and solar PV which created an initial surge in sales, only to generate the consequence of a shortfall over the longer term. We need to ensure the growth we have begun to see this year – both in terms of boiler sales and consumer confidence - continues on a sustainable basis.”
Market growth is set to continue in 2014
Looking ahead at 2014, Mr Arntzen maintains the belief that market growth is set to continue; challenging the industry to ensure it does all it can to ensure this progression happens in a stable and sustainable manner.
On next year’s market, Mr Arntzen said: “A combination of government departments forecasting economic growth, and the likelihood that there will be numerous areas in which it will try to stimulate positivity ahead of the 2015 election, should allow the market’s recovery to continue.
“We must remember that nobody was expecting the market growth we’ve seen over the last 12-18 months, so to an extent, our market is ahead of schedule in terms of where we expected it to be. I would be extremely surprised if we see double digit percentage growth for a second consecutive year, but there is huge potential for sustainable market progression.
“What we want to see is growth which is sustainable over a longer period of time. Business comes much easier when you are competing in a growing market, as opposed to a declining one. After five years or so of decline, it is an extremely welcome change to be competing in a growing market, and we’re not alone in predicting that housing markets will continue to recover and the construction sector will continue to show some recovery out of recession.
“Of course, the Green Deal will be another talking point next year, and there remains 100% alignment with the ambition behind the initiative. The challenges relate to how you go about implementing it, and we must continue to engage with the government to try to convince them that they need to simplify the process. We want this to become a significant scheme that encourages energy efficiency, and the more opportunities we get to put government officials in front of the installer, who is on the industry’s front line, and key to the Green Deal’s success, the better.”