The UK ceramic tiles market is believed to have increased by 3% in volume terms, to a review period high of 81.3 million m2 in 2006, continuing the growth trend evident in recent years. Prior to this, volume sales in the sector increased during each year between 2003 and 2005, equivalent to cumulative growth of 17% to 78.9 million m2 in the latter year. MBD believe market growth is largely attributable to the relatively buoyant construction market, particularly in the private and public residential sector.
The value of the UK ceramic tiles market has been increased during the majority of the review period, with notable growth of 11% and 17% recorded in 2002 and 2003 respectively. However, annual levels of growth slowed to 1% in 2005, taking sales to ?382.3 million. This growth trend is believed to have been reversed by a moderate 2% decline to ?374.7 million at MSP in 2006. MBD believe the decline in the latter year partially reflects increased competition from cheaper imports.
Volume sales of UK glazed ceramic tiles declined by 17% to a review period low of 56.6 million m2 in 2002, although this was fully negated by strong growth of 13% and 12% in 2003 and 2004 respectively. Further growth of 4% is believed to have taken the sector to 75.1 million m2 in 2006, representing overall growth of 33% compared with 2002.
Glazed tiles are believed to have represented the largest share of the total ceramic tiles market in both volume and value terms during the five-year period.
UK manufacturers are believed to consistently market tiles at a higher average price than the average for the market, reflecting their high costs compared with the large volume producers overseas, as well as the top of the range position of in particular Pilkington's Tiles, and the very different product mix of the UK operators.
Following strong growth of 19%, UK output of ceramic tiles reached a five-year peak of 10.2 million m2 in 2004. However, production in the sector is believed to have contracted by 2% during both 2005 and 2006, to 9.8 million m2 in the latter year.
The level of UK ceramic tile production is believed to have been reduced during the majority of the five-year period, although output increased by 8% and a stronger 21% in 2003 and 2004 respectively. Nonetheless, this was partially negated by a 2% decline in the following year. Production in the sector was reduced by a further nominal 2% to 8.9 million m2 in 2006.
Output of unglazed ceramic tiles remained relatively static at 0.9 million m2 during the four year period ending 2005. The level is believed to have been maintained at 0.9 million m2 in 2006.
Volume imports of ceramic tiles declined by 14% to a review period low of 55.5 million m2 in 2002, although this was fully offset by strong growth of 10% and 13% in 2003 and 2004 respectively. The trend of growth is believed to have continued with a further 4% increase taking imports to 75.4 million m2 in 2006.
The floor and wall covering contractor industry was highly fragmented during 2005. Companies employing between 14-24 people commanded 16% of total industry turnover in the third quarter of 2005.
In 2006 independent retailers are believed to have held the majority share of the glazed ceramic wall tiles market, accounting for 33% of the total. This was closely followed by DIY multiples, representing an estimated 29% of the total wall tiles market. In recent years independent retailers have regained much of the market as the demand for specialised tiles has increased and many DIY multiples have in recent years reported poor trading.
Both the number of factories and businesses declined by 3% in 2006, with 185 factories and 180 businesses. The business to factories ratio was 1.03 in 2006, indicating that most businesses only operate one factory.
The ceramic tiles industry is relatively fragmented, with a large number of companies employing less than 10 people, and only 10 of the companies operating in the market employing 50 or more people. In practice the industry is dominated by two large operators, H&R Johnson Tiles and Pilkington's Tiles.
MBD anticipate real term volume growth during each year between 2007 and 2011, with the level of growth fluctuating between 3% and 4%. Overall demand for ceramic tiles is expected to increase by 18% in real terms between 2006 and 2011, reaching 96.2 million m2 in the latter year. Projected market growth partly reflects increasing investment in kitchens and bathrooms, along with continued growth in construction output.
The glazed ceramic tile market is projected to increase during each year of the forecast period, with annual levels of growth expected to fluctuate between 3% and 4%. Volume sales of glazed ceramic tiles are anticipated to increase by 3% to 88.1 million m2 in 2011, representing overall real term growth of 17% compared with 2006.
The UK market for glazed ceramic wall tiles is projected to increase during each year of the forecast period, culminating in overall real term growth of 18% between 2006 and 2011.
MBD anticipate retail sales of ceramic tiles to increase during each year of the forecast period. Overall retail sales are projected to increase by 22% between 2006 and 2011, with the level projected to reach 69.1 million m2 in the latter year.
UK production of ceramic tiles is projected to increase throughout much of the forecast period, although a moderate 2% decline is anticipated in 2007. MBD anticipate overall real term growth of 3% between 2006 and 2011, with the level of output reaching 10.1 million m2 in the latter year.
SOURCE: The UK Ceramic Tile Market Development MBD 2007