Continued growth assured in one of the world's least developed and potentially fastest growing market

Continued growth assured in one of the world's least developed and potentially fastest growing market

i&i – ProPlan’s new edition of their report on the Central European market for Environmental Controls in buildings shows that whilst its performance has disappointed over the last 5 years it is one of the least developed and potentially fastest growing market in a stable region of the world.

The EU - CE(4)¹ market during the last five years achieved a compound annual growth rate of 3.4%, less than half that realised in the previous 5 years. This is indeed sluggish growth for such an under developed market that has penetration levels of one third the average of western Europe. This market is still very dependant upon new construction output in the building sector and this fell away in the first half of this decade, particularly in Poland the largest market. Despite these poor trading conditions demand grew thanks to the installation of more sophisticated systems, extensive refurbishment programmes in the district heating market and suppliers extending their involvement in delivering total building solutions and developing stronger distribution channels. We forecast that the market will grow from •117 million in 2005 to •170 million in 2010 an annualised growth rate of 8.5%. Whilst this rapidly developing market lacks robustness and is heavily dependent upon new construction output, particularly in the commercial sector, retrofit business will shortly lift off by the need to comply with the EU Energy Performance Building Directive (EPBD). In all sectors higher specifications and convergence on the conventional controls market are increasing the penetration of DDC controls. All the world’s major suppliers of environmental control products are well established across most of the four countries and some 5 manufacturer suppliers account for 80% of product sales. However in the systems market manufacturers account for only 50% of the business as third party routes to market have increased their share of the business.

Continued growth is assured for many years to come because the present level of penetration in buildings is very low and the demand drivers of performance and value have yet to be fully realised. So the next five years present major challenges to all those in the supply chain as growth in demand continues across all sectors and the intensity of competition increases. To grow rapidly and profitably in the systems market will require suppliers to focus on delivering total solutions integrating with the business enterprise in the building.

FOR MORE INFORMATION CONTACT Allan P McHale (allan.mchale@iandi.ltd.uk or visit www.iandi.ltd.uk.

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