Clearview South January 2014 - Issue 146 | Page 60

HARDWARE&SECURITY

MESSAGES FROM BRUSSELS
Just as predicted by Roto last year, 2013 has been a tough year in relevant
markets and neither is “much good to be expected” in 2014.
That given, the company will keep to its
current strategy for the year ahead – “defy
market trends, play to our strengths and
consolidate our economic stability, so as
to remain the first choice for customers”.
Basically, Roto intends to “stay on the track
to success”, explained the management
board at the 8th International Trade Press
Day, at the end of November in Brussels, an
event attended by some 60 journalists from
18 countries.
Widespread economic weakness

“When assessing general economic trends
and the outlook for the industry, we did
ourselves a favour in as much as we didn’t buy
into official attempts to talk up the market,
nor did we try reading tea leaves, which is
what research institutes seem to do,” Dr.
Eckhard Keill, Roto Frank AG CEO said. He
asserts that the present situation has justified
his caution: international window and door
markets have been strongly affected in 2013.
Despite this, Roto Group h as been able to
stand its ground and consolidate its position
at a high level, so reaching some “ambitious
targets”. The prognoses for 2014 point in the
same direction.
According to a recent United Nations report,
global economic growth will reach only 2% in
2013. In his analysis, Keill focused on specific
regions: in Latin America previously strong
growth is expected to slow to 3%, while the

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JAN 2014

European economy will continue to suffer
from the prevailing debt crisis. According
to an International Monetary Fund (IMF)
forecast, the BRIC (Brazil, Russia, India and
China) states economic “boom is over”.
Admittedly, there is some positive news: the
USA is emerging from recession and Germany
remains the driving force for the European
economy. However, Keill is concerned
that the “generosity” displayed by CDU/
CSU and SPD in their ongoing coalition
talks will jeopardise Germany’s economical
competitiveness. The overall global economic
outlook for 2014 is slightly more positive,
but risks remain. The Roto CEO warned of
unresolved finance and debt crises around the
world, the global money glut and the policy
of extremely low interest rates, any of which
might turn out to be time bombs.
The recovery that keeps
everyone waiting

The slump in the European building
industry has continued during 2013. Overall
construction volumes in the 19 Euroconstruct
countries have dropped to 1.3 billion Euro,
their lowest point since 1993. Residential
construction has also hit a 20-year low, with
completion planned for only 1.3 million
homes. Germany is almost the only bright
spot.
Euroconstruct predicts that the
“construction industry recovery, which has
been repeatedly delayed over the last couple
of years,” will finally make an appearance by
2015. Residential construction, while not
strong, will make the best showing. As in the
past, trends will vary across regions and if
the research institutes are right, the winners
will be Scandinavia, the United Kingdom
and Germany; while Spain, Portugal, Italy,
Czech Republic and Hungary will continue to
struggle.
Residential construction will also be the
driving force behind the building industry’s
recovery in Germany, with the redevelopment/
renovation segment clearly dominating
ahead of new build. Increased immigration,
solid employment figures, real estate as a
safe investment and low interest rates will
stimulate present and future trends.

Unpredictability and doubts

Window and door markets are, as always,
a mirror image of general business trends in
the construction industry, including regional
and national disparities. For 2013, CEO Keill
predicted a slump of 8 – 10% on average in
all Roto-relevant markets. The outlook for
2014: markets will remain weak in general,
but market contraction will be less dramatic
than this year. Accurate forecasting is further
complicated by the fact that some markets are
“absolutely unpredictable”, a good example
being Russia.
Referring to Germany Roto doubts the
results of the latest survey of the Window
Associations. In particular, the increase in
units by almost 6% to 13.9 million window
units in 2014, alongside a constant material
share, seems “unrealistic”. Roto’s own
experience shows that while the trend towards
more expensive (energy-saving) windows does
produce better figures, the hardware industry
derives hardly any of the benefit. The same
is true for the positive forecast for entrance
doors with an estimated increase of 6% to
1.4 million doors. According to Keill “this
optimism about an increase in door units does
not seem well-founded”.

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