By Jeremy Towler, BSRIA Proplan - Principal Consultant, Intelligent Building Technology
Following their acquisition of the well respected intelligent building controls market research consultancy Proplan, BSRIA have just published their first market report under the BSRIA Proplan brand.
Building on Proplan's proven model, and adding enhanced product detail, the latest report represents the tenth edition of this study in the series "Intelligent Controls in Buildings - Environmental Controls - The European (EU(7)) Market". This latest report covers the period 2007-2012 and represents the most comprehensive study of this business available on the market. The new report is right up to date with the latest findings on the size, shape and drivers of this robust market.
The report finds that the EU(7) market has, over the last three years, shown a significant growth for IBC(e) system sales of nearly seven per cent per annum although only a modest annual growth in IBC(e) product sales of 0.5%. The total IBC(e) systems market in 2007 was worth €2.723 billion.
The Belgian market for IBC(e) Product at factory gate prices supplied by manufacturers in 2007 was €26.8 million, representing an increase of nearly 30% from 2004. Total IBC(e) System sales at engineered and commissioned prices increased 23.7% from 2004. It remains the smallest market in the EU(7). This market is very much demand side driven and is particularly dependent upon new construction. The commercial sector is usually the main driver but its share of new construction and output has fallen from 61% in 2004 to 47% in 2007.
The French market for IBC(e) Product at factory gate prices supplied by manufacturers in 2007 was €121.7 million. Total IBC(e) System sales at engineered and commissioned prices increased 16.6% from 2004. It is the second largest market by IBC(e) Product and third largest by IBC(e) Systems in the EU(7). A substantial penetration of electrical heating is apparent in France, consequently IBC(e) sales have traditionally had limited application in the small building sector. The French market may therefore remain biased towards medium to large prestige buildings.
In 2007, the German market for IBC(e) Product at factory gate prices reached €345.9m, representing a decrease of 4.7% on 2004. Over the same period Total Product increased by 7.3%. Total IBC(e) System sales at engineered and commissioned prices were up 9% from 2004 to €1104 million. It remains by far the largest single market in the EU(7). The German market is characterised by its robustness and a good balance between supply and demand side factors. All countries have increased their penetration in IBC(e) System sales since 2004 but the strongest performance has been made by the UK, which has moved ahead of the Netherlands and closed the gap on Germany. Italy has also significantly improved its penetration and closed the gap on France.
In spite of stagnant or declining construction the Italian IBC(e) market has grown and remains the fourth largest market in the EU(7), although renovation, which accounts for 60% of total construction output has seen mild growth in the last 2 years. There is increasing awareness about energy saving issues and consequently end users have begun to demand more from BAS and are becoming more willing to invest in it, but as yet, there is no new national legislation relating to energy efficiency in Italy. Building controls per capita rose from €3.6 to €4.9, which is a good performance, even if Italy still has the second lowest penetration in the EU(7).
Both Dutch IBC(e) Product and Systems market have experienced growth; Total IBC(e) System sales at engineered and commissioned prices increased by around 20% from 2004 to €158.7 million. The expansion of the market can be attributed to the strong performance of the public sector, the gradual recovery of commercial and a boom in 2007 of industrial construction output. IBC(e) sales to the retrofit market have remained strong since 2000, a sign that there is a high level of system renewal in this market which is undoubtedly benefiting from the new Energy Performance Standard (EPN) for new buildings, which applies to both residential and non-residential buildings. The public sector accounts for a large proportion of IBC(e) sales, but there is a good balance between all sectors. Penetration of sales has risen from €7.95 in 2004 to €9.5 in 2007, however, due to the strong performance of the UK, the country has dropped from second third place in the EU(7).
The Spanish market for IBC(e) Product at factory gate prices supplied by manufacturers in 2007 was €43.6m, representing a small increase from 2004. Over the same period Total Product sales increased to €69.2m. The Spanish IBC(e) System market is the second smallest market in the EU(7) and penetration of advanced controls remains the lowest among the seven countries
The UK is the third largest market by IBC(e) Product and second largest by IBC(e) Systems in the EU(7). The UK market for IBC(e) Product at factory gate prices in 2007 experienced a decrease of 8.7% from 2004. The decrease can be attributed to the drop in electronics product prices and as these increasingly become commodities. Total IBC(e) System sales at engineered and commissioned prices performed extremely well increasing by 50% from 2004. The UK has experienced particularly strong downward pressure on IBC(e) product prices but demand for more sophisticated integrated solutions has caused volume sales to increase faster giving rise to more value added services.
In a very short space of time, energy has become the top driver of the building controls market, initiated by the need to reduce CO2 emissions to combat global warming. European governments are at different stages in introducing the legal frame work and portfolio of regulations to meet these demands, however some already have impressive energy and climate programmes which will have a very positive effect on IBC(e) sales.
Furthermore, the recent big increases in energy costs are another important driver that will strongly support the drive for energy saving. This should also generate more interest in performance contracting which is expected to increase and become a driver for growth.
In the period since 2004 IBC(e) System sales have grown most strongly to the new construction sector, their share rising from 42% to 46% of the market. This was followed by retrofit; however the share attributed to refurbishment has experienced a drop of 7%. Not surprisingly, the commercial sector has remained the largest buyer of IBC(e) throughout.
In 2007, business, including offices, banking/finance and insurance, remained the largest end user, followed by health and education. Siemens Building Technologies have the leading share of the IBC(e) Systems market. Historically, the preferred route to market was through mechanical/electrical installers (contractors), followed by the direct route. However, the balance has shifted year on year such that in 2007 the value added reseller (VAR) route of Controls Contractors (System Houses) / System Integrators and Resellers / Wholesalers / Distributors has become the most popular channel, accounting for more than one third of all manufacturers' product sales.
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