Today we issued a joint market statement from the Confederation of Timber Industries (CTI) and Swedish Wood, pointing to a likely easing of supply tension in the timber market as the pandemic eases.
With timber prices having accelerated in 2021 amidst skyrocketing demand, there has been concern how this will affect the thousands of businesses which timber supports. Structural softwood, a product which has seen significant price rises, is an essential material to timber frame, a commonly used low-carbon modern method of construction using high-tech manufacturing.
By partnering with Swedish Wood, who represent the largest exporters of structural softwood to the UK, the CTI is seeking to provide a complete picture from forest through to end users. Drawing on a wide array of data (cited in the report), the market statement seeks to help generate a more nuanced understanding of the relationship between supply, demand, and prices in timber.
Key insights from the report include:
- Demand is on the rise: Overall construction activity is expanding at the fastest pace since June 1997. Timber and joinery sales alone were up 30.5% in Q1 2020 on Q1 2019, and construction output set to grow 12.9% in 2021.
- Record amounts of softwood are being imported: The cumulative volume of softwood imported into the UK between January and April was 2,678,000m3. This was a 50.6% increase on 2020 and a 17.2% increase on 2019.
- Timber frame is projected for significant growth: While timber frame may see a short-term impact from the current market tension, the outlook remains strong with both the market size and share to grow for timber frame.
- It is highly likely the market will soon stabilize: Market analysis shows the current price increases are far outside the bounds of normal levels over the past 13 years, suggesting a price correction is very likely to follow.
“There have been a number of misunderstandings within the market about how supply, demand and price interact, now we hope with this report to provide greater clarity. Overall construction activity has expanded at the fastest pace in 24 years, and with double digit growth for the construction industry predicted in 2021 there will be challenges.
Demand growing this quickly amidst a global pandemic has given little time to recover, or ramp up production, and this has been seen throughout the construction products industry. The response of the supply chain to meet this demand has been incredible, with the UK importing 50% more softwood between January and April 2021 as compared to last year.
We are optimistic that the current extremes will abate in the not-too-distant future, and we will return to a more recognisable balance between demand and supply. Today with this report we reaffirm the value proposition of timber, as the only mainstream, renewable, and low-carbon building material, and as essential to the UK solving the housing, climate and biodiversity crises.
Another great bit of news we had yesterday was from Nick Boulton, who can reveal we have for the first time seen a public confirmation from MHCLG that CE marking will continue to be recognised after 1 January 2022. This is important because it increases the potential pool of supplies available to importers in future, which helps to ease the current supply issues.
Have a great week all.
Gain a greater understanding of the the relationship between supply, demand and price in the UK in 2021.
You can download the full report from the Confederation of Timber Industries website. Please do share with your contacts.
Our Head of Technical and Trade, Nick Boulton, sat in on a MHCLG webinar today (20/07/2021) where there was a commitment in writing that ending CE marking recognition for construction products cannot happen at the end of 2021.
Instead this will be delayed until after the Building Safety Bill has achieved Royal Assent in 9 -12 months. In the meantime CE marked products can continue to be placed on the UK market.
A package of measures to help tackle the HGV driver shortage has today (20 July 2021) been announced by the government.
In an open letter to the road haulage sector, ministers have pledged to work with industry leaders to attract new drivers, simplify training and encourage people to stay in the industry.
Overall, prices for products and materials have increased by a reported 10-15%, consistent with the Office of National Statistics figure for May of 10.2% overall with 12.8% for those most commonly used in RMI.
Specific products, especially timber, has seen increases of 20-50% for most products and over 100% for OSB and other sheet materials. For the first time we have had reports that some merchants are destocking certain products that are no longer economic.
The purpose of the Home-Grown Homes project has been to identify and test out interventions that could have a transformative impact on the Welsh timber construction supply chain and on the delivery of low carbon social housing in Wales.
This report, released in January 2021, identifies which supply chain interventions may be most effective and how they might be applied through regulation or other means.
Guidance on how to handle and process all items of waste wood is being published today (Thursday) after a four-year project led by the Wood Recyclers’ Association.
The culmination of the Waste Wood Classification Project will see two separate sets of Waste Wood Assessment Guidance published, one for those working in the wood recycling sector and one for those in the construction and demolition sector.
Construction workers who the government considers to be critical may be given individual exemptions from self-isolating, the Cabinet Office has said.
Employees deemed to be eligible for the exemptions would be those whose absence from work could have a major detrimental impact on essential services, including where loss of life could occur if those services were compromised.
TTF members Sales-I have a new podcast, The Best Keep Secret, where they share the secret of sales. In this episode, Dom is joined by Jeff Wallis & Charles Napier from Aftermarket Growth Solutions to discuss what sales leaders should look for in sales training.
It is with great sadness that I have to let you know that David Graham McDonnell passed away on Sunday 27 June with his family at his side, after a long and well fought battle with cancer. Dave, started with W. Howard in 1996, two years after the business moved into manufacturing MDF Mouldings.
For more information, visit ttf.co.uk