Rockwool’s first quarter was marked by dwindling demand and a tough frame of reference, the insulation group’s CEO, Jens Birgersson, explains to MarketWire.

Revenue with the Danish group took a 7% dive in local currencies, including price hikes carried out since the end of Q1 2022.

”Last year was sort of a record for us in terms of volume. It maybe wasn’t the largest top line, but still proved a very solid first quarter. And that is our frame of reference this year,” says Birgersson.

This year has proven more difficult with drops in select segments, including residential construction.

”Construction have stooped in general, with Denmark as the most dire example of residential construction activity at almost a complete standstill,” says Birgersson, highlighting the big impact as a sub-contractor within residential construction.

Developments have been worse in the Nordics and eastern Europe, where demand follows the same pattern. Negative developments in eastern Europe are primarily driven by low sales in commercial construction such as warehouses and logistics facilities.

Developments in demand follow different trajectories, as some markets have been revamped following last year’s slumber.

”UK, for instance, has picked up the pace since [PM Rishi] Sunak took office, and we are currently seeing a rather strong market in the UK. Which is quite surprising,” says Birgersson.

In North America, Rockwool has experienced setback since the middle of last summer and all through autumn, but the insulation manufacturer eyes strong developments in the US especially, but also in Canada.

Within commercial construction, markets differ more as many projects are postponed on account of prevailing economic uncertainties.

In general, the trend for construction activities across several market have been declining when it comes to building permits and active construction, which has urged Rockwool to adjust its production capacity in order to meet evolving market demand conditions.

Rockwool’s current staff merely consists of 250 full-time employees, which corresponds to 2% of earlier personnel. Birgersson explains that most of the required adjustments to production capacity can be met by reducing the number of people working on temporary, short-term contracts.