The numbers of the window frames and curtain walls market

The site is dedicated to the analysis of the building envelope market. In the Reports and Publications section you can find data related to the following sectors: windows and doors (wood, aluminum and PVC) and curtain walls, technical closures, metal carpentry.

For each of the sectors, data are available on the trend of demand in the various market segments and the income and financial performance of the companies. Forecasts of growth and profitability are also provided for a two-year time horizon.

Annual reports are published for all analyzed sectors. In the case of the window and door frames and curtain walls sector, data is updated up to three times a year.

Building Envelope Market Report 2020

The pandemic dealt a major blow to an industry that had been showing clear signs of recovery since 2018. 2020 for the construction sector ended at -6.5%, with GDP down 8.9% (a marked improvement over mid-year forecasts that called for a double-digit decline). A rebound of +3.6% is projected for 2021, which will be slightly less than the GDP recovery (+4.1%).
The construction sector (excluding infrastructure) is worth €102.3 billion, of which €58.9 billion is in the residential segment, which in turn generates €2.6 billion in demand for windows and doors and €43.5 billion in the non-residential construction segment, which generates demand of €1.8 billion between windows and doors (€1,280 million) and curtain walls (€548 million).

A 9% loss in residential construction investment is estimated in 2020 with a +4.5% rebound in 2021. Seventy-seven percent of the residential market is generated by construction recovery, primarily fueled by private owner purchase and renovation of housing. Real estate sales plummet by about 14% in 2020 and investment in renovation by 8.4%. In 2021, investment in residential renovations will benefit from the extension of work halted or slowed in 2020 due to the lockdown and will be spurred by tax incentives. An interesting market, which could help fuel demand in the recovery, is that of second homes located near large metropolitan agglomerations, mainly in the countryside or in mid-mountains. These types of second homes, usually built in the 1970s and early 1980s, can become an ideal retreat for families residing in metropolitan areas with limited space and high housing prices, especially after the experience of lockdown and working and schooling from home.

The non-residential construction segment, fueled largely by new construction for advanced service and commercial uses, reported a decline of -6% in 2020 and will grow 3% in 2021. Expected changes in the post-pandemic work organization could lead to a significant reduction in demand for office and commercial space, especially in metropolitan areas, with consequent effects on occupancy rates and thus future investment in non-residential construction. Only in the second half of 2021 will it be possible to assess the medium-term scenario.

The market of windows and doors and curtain walls

The rate of change in revenues in the window and door and curtain wall sector was -7.7% in 2020 and will be + 3.9% in 2021, resulting in a loss of €368 million, on a total market value of €4.4 billion. About half a million window units were lost in the residential segment. Aluminium windows and doors hold (in value) 36.5% of the market, closely followed by PVC (35%), which shows a strong growth in the last two years, then wood, which drops to 28.5%. In terms of volumes sold (window units), PVC is the market leader with 41%, followed by aluminium with 33% and wood with 26%. PVC, compared to wood and aluminium, continues to grow and to gain market shares due to its strong penetration capacity in the recovery segment, thanks to a widespread and efficient distribution system and a very favourable price/performance ratio of thermal insulation.

Metal windows and doors have been severely affected not only by the slowdown in the residential renovation market, but also by the setback in new construction, both residential and non-residential, where aluminum has a strong penetration. Consider that building permits in the new residential sector have dropped by over 15% in 2020 and in the non-residential sector by 34%.
In this scenario, the Italian market for metal windows and doors, worth €1,409 million, lost 9.2% in 2020 compared to 2019, and will grow 2.6% in 2021. The Italian curtain wall market remained stable in 2020 of 548 million Euro, and will record a growth of 3.1% on 2021 thanks to the recovery of orders that had slowed down in the lockdown and the departure of planned and assigned works in 2020. The turnover achieved abroad by curtain wall manufacturers decreased slightly from 42.9% to 37.4%.

Analysis of the financial statements of metal window and curtain wall manufacturers shows a major impact on operating profitability (ROS), which will plummet from 6.1% in 2019 to 1.9% in 2020 for curtain wall manufacturers, and from 5.3% to -0.7% for metal window and curtain wall manufacturers. On a positive note, there is a limited impact on the financial structure for metal window and door manufacturers, who do not experience a significant increase in the debt rate. On the other hand, curtain wall manufacturers are suffering an increase in financial tension, linked to the impossibility of invoicing (and collecting) on the basis of the progress of works, which are locked down in 2020. In any case, these situations will be normalized in 2021, with the full resumption of operations.


The impact of tax incentives on the window and door market

Tax incentives for energy upgrading of buildings also contributed in 2019 to significantly support the demand for windows and doors with a record value of 1,750 million Euros, thanks also to the contribution of the home bonus. For 2020, a significant downsizing to 1,352 million Euros is estimated. Incentives have become a structural component of the demand for windows and doors, considering that just under 40% of the turnover of metal window and door manufacturers is generated by incentivized interventions, and their maintenance is essential to accompany the modest market recovery.

Medium term trend

The market will continue to be driven mainly by the residential renovation sector, where tax incentives will support investment spending. Consumers, due to the situation of general economic uncertainty, despite the presence of tax incentives, will continue to lean towards mid-range products with a good relationship between price and insulation performance. Premium products will remain confined to a relatively small part of the market.

The non-residential sector will resume its trend based on the initiatives promoted in previous years. However, only in 2021 will it be possible to verify the structural impact of COVID on the organization of work in the tertiary sector; if this has led to a decrease in the need for space, there will be an increase in vacancy in the tertiary sector, with a consequent slowdown in real estate initiatives for office and commercial use, and a fall in the demand for curtain walls.