2024: The view from ‘below stairs’
As a manufacturer of machinery and, crucially, tooling, Sean Mackey, co-owner of Jade Engineering, gains industry insights from a unique point of view.
“As machinery and tooling manufacturers we enjoy, I believe, a unique and even privileged view of the industry,” reflects Sean Mackey, who with Adam Jones, runs Jade Engineering, which supplies the vast majority of machine tooling for Britain’s PVC-U and aluminium frame makers.
“We are subject to the vagaries of a market just as anyone else is, except when we take and fulfil an order for a machine, generally we know that it is the result of genuine need; and our order books for tooling are a very accurate barometer of industry activity.”
Because of the nature of their business, Sean and Adam enjoy insights into the industry that the rest of us only realise weeks or even months later. Although information that is closely guarded of course, they know precisely who took the spoils from the Duraflex fall out.
“The last few years have been excellent for the industry,” says Sean, “and changes have been driven by growth rather than by fear of a downturn; if there have been issues, they have been caused by the high demand.
“The priority, therefore, has been to meet that demand rather than trying to reach budget, and this has resulted in an upturn in new machinery installations, investment in tooling and sticking with what people know rather than exploring new avenues – make what sells, but more of it!
“For us, our core business supplying tooling for fabricators that are changing systems, has fallen dramatically and been replaced with new machinery and tooling to suit investments designed to make more of what people buy most of,” observes Sean.
According to Sean, that trend was disrupted in 2023. “Last year our planned forecasts were interrupted by the rush of fabricators swapping systems following the failure of Duraflex,” he explains.
“In the three months that followed the closure of Duraflex, we worked seven days a week to provide more than 40 fabricators with the tools to produce frames using their new system: 425 sets of cutting heads were milled in our Coventry factory using more than three tonnes of steel, whilst 2,000 pairs of contour blocks were manufactured consuming two tonnes of aluminium.
“And all this in addition to supplying and installing 70 of our specialist single function machines, such as end millers, welders, corner cleaners and saws and various add ons. And whilst this all sounds like a sales director’s dream, our view is that such aberrations are not good from the perspective of the industry as a whole, and therefore not healthy in broad terms for a business like ours, that is immersed in the sector. We are far stronger as an industry when the primary supply chain is robust,” believes Sean.
Indeed, Sean is convinced that the elements popularly believed to have caused the failure of Duraflex and latterly, Safestyle – selling at low margins – are likely to continue to have an impact on the rest of the industry as we move through 2024. The widely predicted downturn in the market has set in, even if the extent of this is yet to be understood, especially as consumer confidence has defied economic forecasts thus far.
“Nonetheless,” reflects Sean, “we have noticed a change in the approach of many fabricators as they are no longer on the hamster wheel of high demand. For example, many have decided to manufacture more products in house, rather than buy them in. They are also focusing on premium products, not only to try to increase margins but in the knowledge that disposable income for the wealthier, hasn’t been affected.
“Industry pundits that have been extolling the virtues of margin protection on lower sales, rather than the low priced, high volumes stance maintained by many larger fabricators, must be feeling quite smug. And fabricators at all levels are taking the opportunity to assess their supply-chain for various materials, in order to eke out improved margins.
“All downturns breed innovation and efficiencies and we are seeing activities that reflect this, driven by an extraordinary resilience that our industry shows collectively, whenever it has faced a crisis. So, contrary to many views I have read, our belief is that 2024 will see our business return to pre COVID levels. Including a level of stability that is long overdue. In other words, directly reflecting the industry’s performance. We at Jade Engineering believe it will be a decent year.”