The Bathroom Manufacturer’s Association chief executive Tom Reynolds shares his views on how global economic volatility could impact the UK KBB market and what steps retailers will have to take to stay ahead as we move into 2024
In recent years the bathroom manufacturing industry has been truly tested but has demonstrated its resilience and adaptability. Indeed, as we look to 2024, we face a tough road ahead, but with unity and innovation, the future holds promise.
Geopolitical risks – particularly the conflict in Ukraine – have led to significant energy cost inflation. Coupled with the instability in the Middle East that traditionally influences oil prices and, consequently, the broader economy, these external pressures present real ongoing challenges.
Bloomberg predicts that if the current conflict were to expand further into a direct confrontation between Israel and Iran, the price of oil could surge from about $90 to $150 (£74 to £124) a barrel.
Yet, it’s not just politics and energy weighing on the sector; global labour market shifts are also being felt acutely. Worldwide the number of people aged 65 or over is projected to double from 703 million in 2019 to 1.5 billion in 2050. According to the Organisation for Economic Cooperation and Development (OECD) the ageing population is one of the factors contributing to labour shortages.
As developed economies grapple with an ageing population, the KBB industry in the UK is already experiencing labour shortages, most notably among installers. This won’t go away in 2024.
It’s imperative independent retailers, installers and manufacturers forge closer relationships than ever before
Complex problems
Another looming global concern is the rise of antimicrobial resistance (AMR). This is when micro-organisms like bacteria, viruses, fungi, and parasites evolve over time and no longer respond to medicines, making infections harder to treat and increasing the risk of disease spread. AMR is a major threat to modern medicine. Without effective antibiotics, common infections could once again become deadly. AMR is already estimated to cause at least 700,000 deaths each year, and this number could rise to 10 million by 2050. The question for the bathroom industry is clear: what is our role in innovating to prevent infection?
As we edge closer to the predicted general election in 2024, political uncertainty looms. With Keir Starmer’s Labour Party showing promise in the polls and placing huge emphasis on construction, there is some potential hope for the industry. Their ambitious pledge of 1.5 million new homes during the next parliament could be a much-needed catalyst for a demand surge. Yet, history has taught us to approach such housing pledges with caution. Can a Starmer administration deliver where past governments have stumbled?
Strength in numbers
Starmer’s inclination towards a closer relationship with Europe also offers a potential reprieve. A new settlement would provide some stability for manufacturers and retailers alike. However, electoral tides are fickle. It remains to be seen if the UK can regain its reputation for political stability, something sorely missed since 2016. Our industry, like many others, craves a return to ‘boring politics’ and the steady economic backdrop it provides.
Diving deeper into the regulatory landscape, Defra’s plans to introduce a new mandatory water label by 2025 presents another challenge for bathroom manufacturers. The BMA has been advocating the adoption of the existing Unified Water Label. Discussions with officials will be crucial this year, but regardless of the election’s outcome, this policy’s continuity seems likely.
On the international stage, the upcoming US presidential election adds another layer of complexity. Any shift in US leadership could ripple through international geopolitics, potentially ushering in a fresh wave of uncertainties. The global interconnectedness of our industry means that such significant political events, even those beyond our shores, can influence our market dynamics.
THE BIGGEST OPPORTUNITY FOR RETAILERS IN 2024 IS…
COLLABORATION
Working together and agility to deal with the volatile business backdrop will be crucial for retailers and suppliers alike.
In these unpredictable times, unity is our greatest strength. It’s imperative now, more than ever, that independent retailers, installers, and manufacturers come together, forging a closer relationship than ever before. The power of a unified industry voice cannot be understated. By presenting a cohesive front on these many pivotal issues, such as mandatory water labelling, we stand a far better chance of being heard and influencing the policy direction. But it’s not just about having political sway. This collaborative spirit is our shield against the whirlwinds of economic and geopolitical uncertainties that lie ahead, and will be more crucial than ever in the months and years to come.