In this exclusive interview, chief executive for the Bathroom Manufacturers Association, Tom Reynolds explains why he sees three economic hurdles looming on the horizon.
“When we assess the progress of the pandemic recovery on a global level, world output is recovering, but it’s fair to say it’s a bumpy ride.
“There are significant constraints across all economies due to supply problems, congestion at ports, and continuing Covid-related issues internationally. Demand for goods is considerably stronger than demand for services and that is positive news for those in the construction products markets like bathroom manufacturers.
“At BMA, our research conducted earlier this year, tracking demand and consumer intentions shows half the population is planning a full bathroom refurbishment. The poll also indicated the immediacy of refurb plans has increased, with 16% of Brits saying they plan to carry out bathroom works in the next 12 months compared to just 13% saying the same at the start of 2021. In fact, many bathroom tasks are viewed as more urgent now than they were at the start of the year.
“The sustained period of demand has created a boom for many construction-related sectors like ours. But in 2022 a new set of pressures may see the nation’s purse strings tighten.
“Firstly, it is now well-documented, economists are predicting bruising UK inflation hikes early next year, with the Bank of England forecasting inflation will hit or surpass 5%.
“The anticipation of this volatility is already taking its toll, with some linking a recent dip in consumer demand and spending levels to faltering confidence.
“Secondly, gas and electricity prices will increase again in April. Although most forecasters predict a correction in the long term, the short-term outlook for the energy markets is rocky. This is sending shockwaves through almost every part of society. The supplies we rely on to heat and light our homes, and to keep the wheels of industry turning, are soaring. When the cost of energy goes up, so too will the price of many other things, as costs inevitably get passed on.
“Thirdly, the housing market, which has buoyed the UK economy through choppy waters recently, is a fickle friend. The end of the stamp duty holiday, credited with fuelling a mini-boom, has prompted wildly varying predictions for the future, with some analysts foretelling a crash, while others are certain the lack of supply will continue to sustain the surge.
“These three challenges are not distinct, of course, they are both reactive and interdependent. In the last 24 months, we have seen an unimaginable set of medical and societal circumstances combining to create economic shocks. Some of that uncertainty and instability will continue for the time being, but despite these unpredictable factors, underlying demand remains high, so there is good reason to be optimistic.”
