Leading heating manufacturer Bosch Thermotechnology has remarked on the difficulties faced by the heating market in a challenging economic climate but the firm has outlined its determination to maintain sufficient capacity to take advantage of any upturn.
Bosch operates two brands in the UK, Worcester, Bosch for the domestic market and Buderus for commercial customers.
Bosch Thermotechnology director, Carl Arntzen outlined a number of key concerns for the UK heating market including rising unemployment and stunted housing sales.
“Unemployment is projected to rise throughout the year. If it gets to 10 per cent and is nudging three million, this will slow down a recovery,” he said.
“For us, the one-off residential market is important and this is affected by unemployment and a slower housing market.”
An unfavourable exchange rate has also exacerbated the difficult economic climate for Bosch, which has extensive facilities and its head office on mainland Europe.
On 1 July 2008, £1 was worth €1.26 but it has traded consistently lower since and is at €1.14 now, according to the BBC’s figures.
“We source components from the Bosch Group in Europe and sterling has devalued 30 per cent against the euro,” added Mr Arntzen.
“We also have our head office in Germany so UK earnings must be converted into euros and this has an effect also. There is no doubt that manufacturers' costs have climbed.”
An additional factor aggravating the market, according to Bosch, is lower oil prices which lessens the pressure to upgrade oil boilers.
That said, Mr Arntzen was optimistic that the housing market could be starting to turn the corner noting that mortgage applications had stopped declining and housebuilders were buying land again.
“We have to be careful,” he added. “The market in 2009 could be only 5-6 per cent down and we will ensure that if there is an upturn we will be able to supply the industry. We will be prepared either way.”