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The Fabricator’s John Roper looks ahead to the election – but not before he takes a look at why the economic outlook is so damaging to the window sector and why that might improve if the colour of government changes.

He writes: So, it's about the economy. How is it doing, how are we doing and what are inflation and interest rates doing?

The government will, as always, tell you that it is doing fine. “Our plan is working,” the spokesman says. (The fact that they have a plan is a surprise, but there you go.)

 

Bank of England

From both a commercial and personal perspective it seems a bit flaky. Admittedly inflation is down, however interest rates are not and as much as the government talks about them following, it is not the government's call. Decisions on interest rates are the purview of the Bank of England. It stops politicians mucking about with it and mucking up the economy at the same time.

Interest rates are the thing. Inflation might influence them but in the end the BoE looks at much wider considerations when setting them and their effect is, in itself, much wider too.

 

The effect on windows

Years ago, most people had mortgages that varied with interest rates. More recently with years of low rates, fixed interest over a term became something banks pushed. When rates rose suddenly through Trussonomics they were still protected, until their terms came to an end. Suddenly house owners are facing a huge hike in mortgage payments that they never imagined could happen.

And this is where it affects everything else. 'Disposable' income shrinks, people become selective about what they spend, home improvements, particularly, go on hold. We hear a lot about the top end of the market and how it is buoyant with demand for big garden doors and expensive windows. But these are not the bread and butter of the window industry. That comes from much lower down the market chain.

The stories are mixed. We have seen a few companies disappear – most notably and most recently Everest which had survived several iterations. The aluminium sector, as always, seems confident but there is a warning from Russell Yates, MD of AluK, that we could be looking at a 'race to the bottom' on prices. This is something that, historically, has caused considerable damage to the home improvement sector, particularly the PVC-U sector. 'Business at any price' is not good business and it would be a tragedy if the aluminium sector went that way.

 

What change may bring

How much difference a change of government will make is a bit debatable. At this stage of the election campaign, I think we can take every claim, every promise with a shovelful of salt. Even manifestos tend to be written in invisible ink. Mind you they can affect the outcome. Remember when Theresa May declared that she would grab everybody's house to pay for their social care and what that did to her majority?

And then we got Boris Johnson!

 

Brexit

The one thing that dare not speak its name is Brexit. The mere thought seems to send shivers down the political spine. The fascistic tendency in the Conservative party seems really to have scared everyone, silly. 'The will of the people', which was never really the will of the people, just the will of a very small, statistically insignificant, majority that had been lied to and generally bamboozled. Polls now actually show a pretty significant majority in favour of, if not rejoining the EU, of being much closer to it. And think what the single market could do for the economy?

Let us hope that the clear out of the House of Commons that we are likely, (we hope) to see will remove all of the headbanging xenophobes and at least establish a sense of empathy with our European neighbours.

 

Picture: John Roper, Editor of The Fabricator Magazine and TheFabricator.pro

Article written by John Roper
10th June 2024

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