Looking at industry statistics for 2020, the UK’s suspended ceilings and partitioning market suffered a significant year-on-year decline. With total 2020 revenues worth an estimated £283 million, the sector is down by around 16% – performance analysts believe it is primarily due to the knock-on effects of the coronavirus pandemic.
Unforeseen consequences
Covid-19’s commercial effect on the UK market for this sector has been slow to reveal itself, and even harder to track and understand without some preliminary analysis.
In broad terms, the UK has a well-established market for suspended ceiling and partitioning products which mostly operates with a predictable maturity: The dominant source of income flows from the non-domestic sector. We spoke to Western Industrial a specialist suspended ceiling supplier and installer. They commented “we have noticed that this downturn mainly concerns construction and/or refurbishment projects involving offices, educational establishments and retail outlets, as well as healthcare infrastructure and entertainment & leisure properties.”
In all such contexts, the installation of suspended ceilings normally occurs as construction projects are nearing completion, with partitions fixings in place even further downstream once commercial tenants develop plans to move in. As a result, while many Covid-19 changes in construction activity were soon apparent, the impact upon suspended ceiling installations and similar activities scheduled for the final phase of construction projects was somewhat delayed.
Market figures bear this out: Up to 2018, the market was clearly in a growth phase. The following year, 2019, was a period of ‘treading water’ with business activity relatively static. This was followed in turn by 2020 when wide-ranging public health measures swiftly brought most ‘normal’ manual work, including construction, to an abrupt halt.
Gradual return of momentum
During 2020 itself, the initial late-spring lockdown period from mid-March onwards began to take its toll on construction, just as it did on many other sectors. A little later, in Q2, something approaching a total shutdown signalled the peak impact of the government’s lockdown measures.
However, the gradual easing of lockdown restrictions, plus efforts to prioritise and regenerate commercial construction activity, did bring some respite to the industry. Even allowing for the impact of social distancing upon work rates and working practices, overall construction as well as repair, maintenance and improvement (RMI) output slowly recovered. In fact, the industry registered modest growth for the period July-December 2020, a feature which continued on into 2021. Undoubtedly, the publication of government guidance supporting a qualified return to work for manufacturing and construction was both timely and helpful.
New post-pandemic norms
History may yet conclude that the most important development brought about by the 2020 lockdowns was the remodelling of working patterns. People were suddenly encouraged to work at home wherever possible. Rapidly changing attitudes about work roles and work-life balance, plus the rapid emergence of robust technological facilities to support the new employment landscape, have made it appear as if many of these changes could become permanent.
If so, this will clearly affect the market outlook to some degree. The office accommodation sector, for instance, was already experiencing a reset prior to the advent of Covid-19. However, the arrival of new flexible working options may yet accelerate the modest downward trend which began as early as 2016. Companies of all sizes and across many industries are clearly rethinking their future office space requirements.
Government sources suggest ministers are considering the possibility of allowing office staff to have a ‘default right’ to opt for home working – a move which may serve to further encourage the drift away from office working. However, the devil may yet be in the detail, because online working has problems of its own. For instance, these new arrangements may yet result in UK workers being forced to compete for employment in a global market where well-qualified workers from abroad could be significantly cheaper to employ. Furthermore, it remains to be seen how insurers, and the courts, will handle the inevitable problems which will surely arise occasionally when large-scale commercial business is transacted from private homes.
Prospects for recovery
Speculative commercial office construction is feeling the effects of this new dilemma. Many office blocks are vacant, or at least going through a period of low-density occupation – a scenario which is not particularly attractive to investors.
However, figures for London show building projects have been on the increase since Q3 2020. Though some projects are pre-let newbuilds, the majority are described as major refurbishments. Here, the emphasis has been on reconfiguring office interiors in order to introduce eco-friendly options such as smart-building control. In addition, there has been a continuing demand to make office space more Covid-secure – for instance by rethinking ventilation and opening up confined areas. This same trend in the capital is very likely occurring everywhere else in the UK too, which means clean, hygiene-friendly tiled suspended ceilings will be more in demand, alongside requests for re-partitioning projects to create more open-plan office spaces.
Despite the challenge of recent reduction in demand, medium-term growth prospects for the UK suspended ceilings and partitions market remain fairly upbeat, with growth forecast to increase to about £335 million by the year 2025.
