Opinion: 2023 Predictions | 23
has brought prices down – in contrast to other materials. In 2023, with less strain on the supply chain, general product availability should have an opportunity to recover further – although significant increases in the cost of energy will adversely affect prices for energy intensive products. Undoubtedly, 2023 will bring its own challenges but, when times are uncertain, trade associations are at their most valuable, providing up-to-date data, business support, training and lobbying government. The BMF maintains a strong presence with government and our construction peers, not least through our pivotal role within the Construction Leadership Council (CLC), where we co-chair the Product Availability Group, and play an active role in critical policy areas, such as housing and the national retrofit strategy. This will continue in 2023, with the BMF one of 10 key trade associations on the CLC working to address the issues facing the industry. ■
Stephen King managing director, SCA Products (UK) Ltd
Upon early reflection, 2022 was a year of correction after the Covid years of 2020 and 2021, which showed unprecedented demand in the UK.
The war in Ukraine and wider negative economic news led to a significant drop in demand for softwood in the second half of 2022, with importers seeking to reduce high stocks of higher priced goods. During Q4, it was evident that this was widely achieved, and customers returned to purchasing more normal volumes for Q1 2023. Sentiment on softwood prices has also started to change, but there remains an element of fragility in the market as we enter 2023.
Undoubtedly, 2023 will bring its own challenges but, when times are uncertain, trade associations are at their most valuable, providing up-to-date data, business support, training and lobbying government
Whilst there has been a reasonably good start to trading, this has been primarily to re-stock, and it remains to be seen whether that continues through the quarter. Cashflow for many companies is likely to be a concern in early 2023 and credit control will become a more significant factor in the nearest months. The ability of business to pass on increased costs will be tested. The outlook into Q2 and Q3 is more positive, however, driven by both activity in other global markets and the reality that Russian and Belorussian timber will be completely absent, combined too with a view that both interest rates and inflation are close to peaking. Supply and demand look to be heading back toward a more balanced scenario, and there are early signs that China, having removed its strong Covid restrictions finally, could see an upturn in activity regarding softwood purchases.
Underlying consumption here in the UK, driven by consumer confidence, is difficult to predict, and time will provide increasing clues as to the trading reality later in the year. Specifically, the garden sector, having been largely absent in 2022 is likely to be serviced by stocks already in the UK, particularly decking.
Investments continue at the major European sawmill groups and there is continued evidence of consolidation in the major merchant sector. There are likely to be more takeovers and mergers during 2023 at various levels of the supply chain, including by major European companies in both the UK and other markets. ■
Cashflow for many companies
is likely to be a concern in early 2023 and credit control will become a more significant factor in the nearest months. The ability of business to pass on increased costs will be tested
www.ttjonline.com | January/February 2023 | TTJ
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