The UK domestic heating market was worth an estimated £968m at manufacturers' selling prices (msp) in 2002, an increase of 3.5% on 2001. Growth has been erratic since the beginning of the 1990s, as the market has been affected by changing levels of consumer confidence and spending.
The market includes both central-heating and stand-alone space-heating systems and equipment. Products covered by this report include central-heating boilers, radiators, pumps and controls, and space-heating appliances. The boilers sector has benefited from changes in building regulations, which now require more energy-efficient products, such as condensing boilers. Pumps and controls have also experienced growth, driven by the wider adoption of more sophisticated products. The radiators sector has been affected by overcapacity within the industry, which has placed increasing pressure on prices and margins. While space-heating appliances tend to perform better in periods of bad winter weather, niche sectors, such as solid-fuel stoves and heaters, have benefited from a fashion focus since late 1999.
A major factor influencing the performance of the UK domestic heating market has been changes to the Building Regulations, which have encouraged the specification of more energy-efficient appliances, particularly in the new housebuilding sector. Other factors that have benefited the market include the recent period of relatively buoyant consumer spending, boosted by low inflation and low interest rates. Consumer confidence has also been relatively high, with many householders choosing to invest in improvements to their homes and taking the opportunity to replace or upgrade their heating systems.
Corporate activity since late 1998 has meant that the supply side of the market is becoming increasingly consolidated, and a group of multinational companies, with production facilities in a number of countries, are emerging as the market leaders.
The domestic heating market is likely to be the subject of successive innovations in the short to medium term, with the possible introduction and wider adoption of combined heat and power (CHP) systems and the use of alternatives to fossil fuels, such as solar energy and fuel-cell technologies. Emphasis is also likely to focus on energy efficiency improvements, with some more aesthetically pleasing products, e.g. new radiator designs, likely to continue to provide high-value niche sectors.
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