The HVAC and smart energy product market is estimated to be worth £4.5bn in the UK per annum. Market growth was expected to be a healthy 3.1 per cent for 2016 prior to the Brexit vote but BSRIA research with suppliers post Brexit now anticipates this will shrink to a ‘meagre 1.1 per cent’, knocking off £95m compared with the pre-Brexit view.
Growth has dropped from a very strong 12.8 per cent down to 5.5 per cent. Smaller splits have suffered due to cool summer in first half, plus issues with the distribution chain, higher than expected residual stocks and a weakening in the critical retail market. Brexit is already ‘playing a part’ as any delays in investment decisions can impact these products very quickly.
Andrew Giles, director of Worldwide Market Intelligence, BSRIA, said, ‘Around 80 per cent of the £2.2bn market is domestic boilers, water heaters and radiators. Renewable alternatives remain niche markets: heat pumps are falling with RHI having a limited impact. The main heating markets are saturated and over 90 per cent of sales for replacement and extensions/refurbishment.
With the death of the Green deal and other schemes BSRIA had expected a flat market for heating but now expect a small proportion of consumers to delay going ahead with refurbishment because of the general uncertainty surrounding Brexit resulting in a drop of 1.2 per cent in the market.
Commercial fire and security and building control products account for 68 per cent of the £1.6bn smart technologies market. These products are more likely to be put in towards the end of commercial projects.
In 2017 the continued pull through of commercial projects nearing completion which were started two years ago will mask any further falls from Brexit, with almost no effect on fire as it is regulation driven.