In the latest of our specialist market overviews, Robert Nicholson of Gardiner & Theobald looks at hot topics, lead times, key suppliers and costs in the lift and escalator sector – plus a specialist manufacturer is put under the Q&A spotlight
The world market is dominated by five lift makers: Kone, Otis, Thyssen, Schindler and Fujitech. However, there are many thriving small and medium-sized lift contractors in the UK market. These firms provide the smaller and bespoke lift installations that the major contractors are unable, and often uninterested, in supplying. Indeed, the independent lift making sector in the UK is considerably larger than is to be found in continental Europe and many of these firms have considerable success in exporting smaller and bespoke lift installations to Europe.
Since 2000, there has been a significant increase in the growth of the UK lift and escalator market. It grew in value during 2001 to £890m, an increase of 11.6% on the £790m of 2000. However, this level of growth has not been sustained, with the market growing 4.9% in 2002 to £925m and just 2.1% in 2003 to £940m. Figures for 2004 are not currently available but most lift contractors believe that the market will, at worst, maintain the level of growth seen in 2003 or will show improved growth owing to the general strengthening of the construction industry and the implementation of Part M of the Building Regulations in October 2004. Most sources in the industry believe that the market will exceed £1bn in 2004/05.
The market can be divided into four main sectors: new work; modernisation and refurbishment; repair and maintenance; and export orders. Looking at the market between 2000 and 2003, new work has consistently accounted for 40-43% of the market. A close second to this is repair and maintenance, which has accounted for 38-40% of the market. Modernisation and refurbishment is a significant contributor to the marketplace with a consistent 16-18% share. This is a sector where the smaller, UK-based lift contractors are particularly active and successful.
The market for new lifts is competitive. Lift contractors are responding to this by absorbing inflationary costs, reducing operating overheads and cutting the price of their products, which have come down in real terms. The fact that UK lift and escalator market overall grew 2.1% in 2003 is purely down to the strong performance of the maintenance and refurbishment sector, aided a little by the UK export effort. Sources in the industry indicate that a sustained price war has been in progress since 2002 between the large lift makers, which has had a ripple effect throughout the entire UK lift and escalator market.
However, with the construction industry still strong and the large increases in steel and copper prices, 2004 figures could show that the average cost of new passenger lift installations increased compared with 2002 and 2003 as lift contractors seek to pass on increased costs and improve margins. As the level of new units sold has maintained a steady, albeit small, growth over the past four years, the overall value of the lift and escalator market is likely to increase over the next few year.
It is interesting to note that the repair and maintenance sector has shown steady growth and appears to be immune to the changes in the construction industry. This could be because most building owners have long-term maintenance needs and often sign medium- to long-term maintenance agreements ranging from three to five years, or even longer. Most lift contractors are willing to cut margins and offer discounts on new lift and escalator installations to secure lucrative, long-term maintenance contracts with building owners and or occupiers that will provide them with a dependable, guaranteed income.
This datafile was compiled by Robert Nicholson, an associate at quantity surveyor Gardiner & Theobald. For further information email him at email@example.com
Lift specialist Q&A
Apex Lifts is based in Sidcup, Kent, and has a turnover of £9m and 80 employees. Its work is UK-based and it specialises in the installation, refurbishment and maintenance of its own and other manufacturers’ lifts and escalators. It also makes and installs bespoke lifts for refurbishment projects – work that its managing director Warren Jenchner describes as “modernisation”. Here he gives an insight into the current state of the smaller UK lift market.
What is the current state of the market?
I can’t comment on the new-build market because this isn’t a sector we are involved in. Our work is split 50–50 between modernisation work and maintenance.
The modernisation market is up and down; it goes quiet then explodes again. It’s buoyant at the moment but did go flat last year. It depends on what customers you’ve got. Maintenance work is growing steadily; we have picked up some large portfolios in the past couple of years with property management companies such as Knight Frank and Richard Ellis.
What are your margins like?
They’ve always been tight; it’s the nature of the construction industry and the side of that we fall on. We cope by the amount of work we do, and by being efficient.
Do you find maintenance work particularly lucrative?
Maintenance prices have decreased in the past couple of years. This is because companies lose big maintenance contracts then need to buy in extra work. They need a certain number of contracts in their portfolios to keep their masters happy so they take on maintenance contracts to make up the numbers at uneconomical prices.
Is there any evidence to suggest that some lift specialists sell lifts cheaply to secure long-term maintenance contracts?
This isn’t something we do. I think this has changed for companies that do this because the maintenance rates are so low. There’s no point in selling lifts cheaply then doing the maintenance work cheaply. All maintenance work is tendered at the moment so there’s no reason to hold onto the original supplier.
Has the introduction of the Disability Discrimination Act and Part M generated more work?
Yes, considerably more. It’s got people to modernise their lifts completely – there’s been a lot of large sites in London where this has happened recently. A lot of lifts have also been upgraded to comply with the DDA.
Hasn’t the DDA-related work dried up because people should have complied with it by October 2004?
It’s going on more than ever, the understanding of it has only just started to happen and people are really getting their budgets together now. It could go on for another six to eight months.
What are the key design considerations when specifying a lift?
Lift contractors should be involved early so the building can be designed around the lifts rather than the contractor deciding what they think they need. It ensures the building is “lifted” correctly – that there are enough lifts in the building. People need to think about the speed, number of lifts and the travelling times between floors and where certain offices and the restaurants are. It’s not a good idea to put the restaurant on the first floor as all the lifts will stop there, slowing journey times to the rest of the building. It’s better to put the restaurant on the ground floor.
What are the lead-in and installations times for your lifts?
Our lead-in times for a bespoke lift is 18–20 weeks. As a rule of thumb, installation takes about a week per floor plus five weeks, so a five-floor job would take 10 weeks to install.
Are you optimistic about the future?
Yes, I am optimistic; the modernisation market seems fairly buoyant again.
The lift and escalator industry, in common with many other industries, is constantly refining its product ranges in response to advances in technology, the demand of their customers, changes in the regulations governing the industry both in the UK and abroad, and to gain technological edge over competitors. The past 10 years have seen significant developments with the industry.
Motor room-less lift technology
The introduction of motor room-less technology has been the single biggest advance in lift design of recent decades and has had a profound effect on the efficiency and cost of lift installations. Instead of a dedicated motor room on the roof of the building the motor, winch gear, drive units and control panels are incorporated into the lift shaft. The main benefits of a motor room-less design are that the costs of building and cooling the motor room are eliminated and net lettable floor space can be increased. The downside is that lifts are restricted in size and because the machinery is in the lift shaft, maintenance and replacement is more difficult therefore more costly. Motor room-less lifts are now widely available and it is only in high rise applications of more than 20 storeys, which require large capacity and travel speeds, that the traditional electric traction lift remains dominate over the motor room-less lifts.
Disability Discrimination Act
The Disabled Discrimination Act 1995 requires building owners and occupiers who provides facilities, goods and services to the general public to make these accessible to all. All properties that come under the scope of the act should have been compliant from October 2004. In terms of lifts, this means increased provision of platform hoists, stair lifts, wider access to lifts and accessibility of lift controls to the disabled, tactile controls able to be read by partially or profoundly blind people, hearing aid loops and speech reinforcement for the hard of hearing, use of contrasting colours to aid partially sighted people, and easy to use and failsafe controls for those with mental or learning disabilities.
Part M of the Building Regulations
This came into force in May 2004, and applies to new and existing, non-domestic buildings where any extension, alteration or material change of use is made. Part M now requires building designers to provide an “access statement” in the planning application.
In order to satisfy requirement M1 or M2 of Part M, the lift strategy for a new building must include passenger lift(s) serving all levels in all new buildings, or if this is physically impossible, the use of platform lifts for disabled people will be accepted. Platform lifts are also acceptable in existing buildings if it not possible to provide passenger lifts to all levels. The use of wheelchair platform lifts or stairlifts will only be accepted under exceptional circumstances.
Lift control technology
In the past seven years, there have been major advances in lift control technology and these have allowed a more efficient use of existing lifts. These advances are principally dividing lifts into sectors serving specific floors, and systems that announce which floors lifts will stop at.
Flat belt technology
Otis has developed the first flat-belt cable for use in their Gen2 lift systems. The belts are only 3 mm thick and 30 mm wide but are more durable than traditional woven rope, have better traction and are about 20% lighter. This technology is very new but is not expected to increase the costs of Otis lifts.
Types of lift
For commercial applications, there are three main types of elevators used in modern installations:
- Scissor lifts Used for very low-rise installations, for example a disabled persons lift.
- Hydraulic Used for low rise and/or heavy lift requirements, such as a vehicle lift.
- Traction Used for mid to high-rise installations such as in office buildings.
The most popular form of lift installation is the traction lift system, which can be further subdivided into geared or gearless type installations.
Generally a scissor lift has either a fixed platform or “car” that is raised and lowered by movement of a centrally hinged, X-type frame that moves the platform up or down when expanded or contracted in the same way as scissor car jack.
As a result, this type of lift is only usable over short lifting ranges of less than 6 m, such as a disabled persons hoist or docking bay goods lift. The speed of scissor lifts is very slow but they do have the advantage of requiring little or no lift machinery pit as the lifting mechanism folds up into the base of the elevator. Furthermore, scissor lifts do not generally require a separate or specific machine room and can be made to fit into small or difficult areas.
With a hydraulic lift, the car is supported by a hydraulic ram, which is a tube containing a piston that is forced up or down by hydraulic fluid under pressure. The fluid is stored in a reservoir and a motor driven hydraulic pump provides the pressure. The advantage of hydraulic lifts is their simplicity, but they are only suitable for low-rise applications because the cylinder containing the piston has to be buried at the base of the lift in a hole the same depth as the travel of the lift.
With traction lifts the car is raised and lowered using six to eight steel cables attached to the top of the car. The cables are looped around a grooved pulley called a sheave located at the top, or above the lift shaft. This is turned by an electric motor either directly or via a gearbox. Energy is saved using a counterweight traveling in the opposite direction of the car, and attached to it via cables. This works using the “see saw” principle whereby a small push is all that is needed to move a seesaw with two people on either end. Because the counterweight balances the weight of the car plus about 45% of its rated load, the motor only has to overcome friction and any weight on either side of the point of equilibrium. The lift shaft is fitted with rails to guide the lift car and there are safety braking systems in the unlikely event that the cables break.
Lead times for bespoke lifts on major projects remained constant at 38 weeks from the end of 2001 up to the first quarter of 2005. Recent indication from lift contractors suggest that lead times could extend further to about 42 weeks through increases in mobilisation, design and delivery periods. This would reflect the pressure that a strengthening UK construction market is placing on the UK lift and escalator market, as well the external pressure that is being felt from the current construction boom in China, which is affecting not only the cost of raw materials but creating shortages of component items such as electric motors, hydraulic equipment, electronic components etc.
It is still possible to get reductions on these lead times, with smaller bespoke schemes lead times may be shorter – possibly about 32 to 35 weeks.
Standard lifts offer a greater saving in lead times, with lead times typically between 16 to 22 weeks, with some suppliers quoting shorter periods. However, any deviation from a particular manufacturer’s standard specification or list of available options can result in the lead times lengthening to those stated for bespoke lifts above.