A joint marketing statement from the Confederation of Timber Industries (CTI) and Swedish Wood points 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 with 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.
Alex Goodfellow, chair of the Confederation of Timber Industries said:
“With this joint market statement we are firmly responding to any who would raise doubts about the value proposition of timber – which is here to stay.
“Timber is the only mainstream, renewable, and low-carbon building material, and it remains essential to the UK solving the housing, climate and biodiversity crises.
“Timber frame is a proven, quick, high quality, cost-effective and low-carbon modern method of construction, which is unmatched across the wider sector.”
“Of course, this has been a difficult time for some manufacturers, who are not currently able to get enough timber in hand to meet all their customers needs.
“However, as a supply chain we are determined to fulfil all our commitments, and even amidst this unusual situation, we will deliver – the new house building industry can rest assured that timber frame will continue to be key in helping them take on the housing crisis.
“Our message to you, as well as the wider market, is that this situation is temporary – and our £10bn supply chain will continue to advance.”
David Hopkins, chief executive of Timber Trade Federation said:
“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.”
Mathias Fridholm, chief executive of Swedish Wood said:
“The UK remains an extremely important market to our members with firmly established business relationships reaching back decades.
“Our members are working hard to meet the needs of the UK market, and are already exporting more timber to the UK now than at any time in the past decade.
“While it may be difficult for some now, we expect market forces will mean that a more ‘normal’ balance between supply and demand will resume in the near future.
“We will continue to work with our partners in the UK to provide timely information, with communication essential for overcoming any tensions in the market.”
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