January’s figures reflect a market slowly regaining momentum after the December slowdown, though broader economic pressures continue to shape the outlook for installers.
Positive indicators such as increased leads and sales suggest a strong start to 2025, but upcoming economic challenges posed by rising labour costs could impact future performance.
Leads saw a strong comeback, jumping from 57.4 in December to 124 in January – a 116% increase.
This surge not only reflects renewed market activity post-Christmas break, but also surpasses the 99 recorded in November, which coincides with expectations of early-year market activity, possibly influenced by renewed consumer confidence and predictions of a property market rebound.
Industry analysts point to a potential mortgage price war, alongside a rush to complete property purchases ahead of the expiration of government stamp duty incentives.
We expect these factors to drive renewed interest in home improvement projects, with homeowners prioritising energy efficient home improvements, to increase property values.
Sales reflected this lead growth, climbing from 29 in December to 48.7 in January – almost matching November’s 49.9.
However, while activity levels are picking up, there are signs that homeowners may still be cautious.
Conversion rates dipped from 44% in December to 40.5%, suggesting that while more consumers are making inquiries, fewer are ready to commit.
Inflationary pressures remain a concern, with the UK economy still facing above-target inflation rates.
This has kept interest rates high, currently at 4.75%, although economists expect the Bank of England to cut rates multiple times this year to prevent recession risks.
These lower borrowing costs could stimulate more home improvement investments, particularly in high-value renovations.
Average order values in January stood at £3,943, a drop from the December high of £4,245 but still significantly above November’s £3,615.
This suggests that although the premium market remains strong, the broader market may be slightly more sensitive to price fluctuations, particularly given rising living costs.
Looking at the bigger picture, the data reflects both expected seasonal shifts and early signals of a market revival.
With the potential for interest rate cuts and a resurgence in property sales, there’s cautious optimism for the year ahead.
However, businesses must still contend with rising labour costs and the threat of more industry casualties before improvements fully take hold. As always, efficiency and visibility will be key.
By leveraging tools like Business Pilot to manage resources and streamline operations, installation businesses can reduce their reliance on labour, maintain profitability, and capitalise on opportunities in a shifting market.
