Shrinking markets

The downturn of the German window market in 2007 was worse than many had feared: the market contracted by 7.4 per cent. Recovery in 2008 will be no more than moderate, with about 1 per cent growth in volume terms. The survey shows that the market in Italy is continuing to decline this year too, though only by 1.4 per cent. Germany: premature rejoicing The proclamation of a boom in the German window market in 2006 was premature. The market growth of 6.4 per cent in volume turned out to be a flash in the pan as a result of the rise in VAT. The researchers say that 2007 was a grim year, with a 7.4 per cent decline in volume as a direct consequence of the cancellation of the government subsidy for home owners. The simultaneous increase in VAT did significant damage to the private renovations market. Building permits in the residential sector experienced a fall of 12.9 per cent. The German window market is expected to recover slowly in 2008 and the following years, growing at an annual rate of 1 per cent. The non-residential sector is still driving this growth, while the residential sector needs a certain amount of time to recover, after spending years in the doldrums. Germany, with a score of 128 windows per 1.000 inhabitants, currently ranks behind countries like Russia and Czechia in a European comparison. Metal on a high The unequal development of the different building segments is mirrored in the market share of the different materials used. Metal windows, primarily used in non-residential construction projects, are performing well and selling in increasing quantities. By contrast, PVC windows are taking the hardest knock: here a 14 per cent decline in the quantity sold has set PVC back to a level even below that of 2005. Combination windows, which form the smallest segment, saw growth of 10 per cent in 2007 Fragmented market The German market still lacks a dominant leader. The top 10 window producers together account for just 22 per cent of the total market. Their brand names are almost unknown, which means that the decisive factor is often the price. The industry has not managed to pass on the steadily increasing prices of raw materials to consumers. Italy: moderate downturn The outlook is slightly better in Italy. Although the market contracted in both 2007 and 2008 (-1.4 and -1.2 per cent), the decline is not as dramatic as in Germany. An average decline of -0.6 per cent is forecast up to 2011, which means the window market will not escape from the poor economic environment. A market collapse is being avoided by the consistently strong home improvement sector, which is continuing to grow as the result of a tax advantage.