The market for insulation products is estimated to have fallen by around 16 per cent to £1.4bn a year, mainly due to the impact of Covid-19 restrictions on new build and domestic retrofit activity.
AMA Research concluded that key market influences also include changes to Building Regulations and energy prices.
The Building Regulations Part L 2013 was updated with the aim of reducing carbon emissions by a further six per cent on top of the 2010 standard for new domestic buildings, and by nine per cent for new non-residential buildings.
Government subsidy schemes also drove growth in the domestic market. AMA Research reported that industrial energy costs had increased sharply since 2016 (although coal and gas prices fell in 2019), and in the longer-term are forecast to rise further, which is likely to result in higher end-product prices for insulation products.
This is likely to be compounded by the ongoing weakness of sterling, leading to increased import prices for many materials.
Despite a decline in the retrofit market, the overall market increased year-on-year from 2016 to 2019 through strong demand in new housebuilding, a growing market for home extensions and a strong non-residential new-build sector, particularly in 2017, which saw the total market value increase by around six per cent.
Alex Blagden, senior market analyst at AMA Research, said: “The market is likely to decline by a further three per cent in 2021, but will recover from 2022 onwards, with growth rates of around four to six per cent per annum through to 2024”.
This recovery is likely to be driven by strong demand for new housing, recovering levels of non-residential new work and the prospect of an improved retrofitting market through increased eco funding from 2022.