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Water Heating Market – A Game of Two Halves

Carl Arntzen, director of the Worcester Bosch Group, offers his view on how the year has been for the water heating market and what his expectations are for 2011.

As 2010 draws to a close, it is probably fair to say it has been a year of mixed fortunes for the water heating market. The recent market as a whole might be best summed up by that much used sporting analogy – a game of two halves.

Compared to 2009, the first half of the year was almost certainly influenced by the boiler scrappage scheme, as well as, to a lesser extent, the fact that the first half of 2009 was pretty bad in terms of boiler sales, if making a comparison. Had the first half of this year been worse than the same period in 2009, the industry would have been in an unhealthy position.

With the boiler scrappage scheme, I think the general consensus was that it generated a lot of awareness and created additional business. How much additional business will be difficult to get a final fix on – however, I think there is a general belief around the industry that it certainly dragged some sales forward from possibly the second half of this year or the first half of next year, which provided a boost for the whole supply chain.

If you look at the water heating market year to date, for the first six months of the year, the boiler market was up around 8.5–9 per cent. And if you talk from a marketing and industry point of view, I think everyone was very happy and satisfied with that. The market was showing a pleasing recovery in the first half of the year.

Since then, we’ve seen that things are starting to slow down a little and, to the end of September, the water heating market as a whole across all products is now around six per cent up on last year. We’ve had a couple of negative months compared to the previous year and the expectation is that things will continue to slip down slightly. So the market will probably be about five to six per cent up by the end of the year.

Overall, you have to say that it has been a good year. Five or six per cent up on the previous year represents a positive outcome, particularly when you consider that, in 2009, we were between four and five per cent down on 2008. So to go from minus five per cent to plus five per cent is a good turnaround.

On the plus side, to some degree I think the recession has shown us that the water heating market has not suffered quite as badly as other areas of the economy. This is probably because boilers aren’t as much of a discretionary purchase as other items. So you can put up with the old-fashioned bathroom suite or delay buying the new flat screen TV, but if the boiler breaks, people need to do something about it.

Contact Worcester Bosch on 08448 923000 www.worcester-bosch.co.uk

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