By Gareth Jones, managing director, Solar Fabrications.

The recent increase in interest rates (3 August) was disappointing because the inflation we’re experiencing now isn’t created by excess demand.

Post-Covid there was significant activity in the home improvement market and supply chains were under pressure. Given that those issues of supply and demand are not the case now, is an increase in interest rates the right measure to stabilise the economy when we are perilously close to tipping into recession?

Some of the country’s price inflation is artificial and, in my view, verging on unethical. Energy companies have been questioned about profiteering, fuel companies have enjoyed bumper prices at the pumps, and the banks are maxing mortgage rates but we’re not seeing the same applied to saving accounts, if you’re lucky enough to have some cash to put away.

All of this inevitably places constraints on spending power and, with it, a downturn for the home improvement sector. In fact, across the industry manufacturers and suppliers are seeing a 15-20% decline on last year’s levels.

Admittedly, that decline is against a long period of boom back to 2019 levels, so shouldn’t be a massive concern particularly as the market has performed better than we all feared at the beginning of the year.

We have noticed that our trade customer sales levels at Solar Fabrications is reflecting a downturn but not so much on composite doors, which continue to be a relatively low cost, high impact home improvement for consumers.

We supply doors into the Local Authority and Social Housing sector and have seen real growth in this area, which has helped considerably and is evidence, if it were needed, that it’s wise to have a foot in more than one market.

Where this market is concerned, the proof of the pudding will be in the budgets allocated for the next financial year, specifically any cuts the Government might make in that area…and indeed the outcome of the next General Election.

The newbuild market is extremely buoyant for Solar Fabrications, through our Solar Norvik business, largely because we are growing market share and working with ambitious developers who are flexible on the type of property they build and for different markets, private and social housing.

This helps the Solar Fabrications group maintain a healthy balance sheet, where volume is slowing elsewhere. Given the housing shortage, we would expect to continue to do well but will we see a slowdown in the build programme in the coming years. More questions, more uncertainty so let’s all continue to hold our nerve.