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Construction output chart

A return to more stable trade in 2023 - for now.

Extract from a Timber Development UK (TDUK) article - 29 August 2023

'The timber industry is returning to a period of stability compared with recent years, the latest import statistics suggest. Yet wider construction industry forecasts, suggest a sharp decline in output is coming'. Timber Development UK

 

TDUK reports on what this means for the different timber sectors.

In May 2023 – the latest month for which data is available – imported volumes of softwood, hardwood, plywood, particleboard and engineered wood products were higher than in any of the preceding months of 2023. Softwood imports have proved particularly buoyant, with volumes seen in May, 8% higher than the 2023 average.

However, this is still 8% less than during the same period in 2022. And import volumes in the month of May 2023 were still 5% below those seen during May 2022.

TDUK’s Head of Technical and Trade, Nick Boulton, says:

“Stock levels on the ground in the UK have been strong, with buyers being able to access their desired specifications across all the main product groups and at price levels more reminiscent to those seen pre-COVID. The only notable exception is the shortage of Birch Plywood due to the sanctions imposed on Russia and Belarus.

Though the overall economic outlook is undeniably negative, these latest figures suggest there is room for some cautious positivity heading into Q3. After several years of supply chains lurching from feast to famine and back again, the first half of 2023 has seen a return to what many buyers and sellers will recognise as stable trading conditions.”

Reduced construction demand ahead

Sticky inflation and high interest rates are reducing confidence in the construction sector. This is seen in the latest Construction Products Association (CPA) forecast, with crucial timber demand-driving sectors like private housing and repair, maintenance and improvement (RMI) predicted to decline by 19% and 11% respectively, before likely returning to growth in 2024.

Nick continues: “If construction demand in the UK remains low in the second half of 2023, as predicated by the CPA, the supply and demand balance for structural softwood should remain stable overall but specifications in the most popular sizes and lengths may start to see holes appearing as we progress through Q3.”

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