Sector Market Update: Chipboard | 27


million-unit increase. Asked about the effect of Chancellor Rachel Reeves’ November Budget on housebuilding and RMI (Repair, Maintenance and Improvement) markets, the spokesman said that he felt that “lack of support remains and that there is no real stimulus in the market.” Another major UK chipboard manufacturer said that everybody was hoping for a miracle in the market but there was no sign of one on the horizon. Meanwhile, he said manufacturers seemed to be chasing each other down hill in pursuit of sales at ever lower prices. As the spokesman said, this clearly cannot continue and his company intended to increase prices on P5 and laminated boards by 5% in early 2026. “There is no choice. Costs are going up but prices are going down – the whole chain has no margin.


”Brick, concrete, etc have all put up their prices while the chipboard industry has not. Over the last two years, a lot of people are trying to talk the market up, but it is not happening,” he said.


The news of the National Timber Group going into administration, whilst sad, did not surprise the spokesman. This was the UK’s largest independent timber distribution and processing group, operating a number of brands including Rembrand, Scotia Roofing, Arnold Laver and Orchard Timber Products. “I don’t think it will be the last,” he said. The spokesman was also not optimistic about the future of several furniture makers in the UK, whom he described as “on the brink”. “They have not invested for a long time and there is a lot of furniture, made in China from melamine faced chipboard, coming into the UK, so my customers have a problem,” he said. “The UK is doing nothing about anti- dumping measures.” Asked whether he expected any improvement in the market in 2026, the spokesman said he didn’t think so. Even if interest rates come down, he said, it will take nine to 12 months to have any effect, but lower interest rates are needed to get the housing market moving. “I think markets will be flat again in 2026,” he said. “The increase in minimum wage will also lead to inflation. We are producing chipboard to our capacity, but we are not making any money and that is not sustainable anymore.


“But I’m neither pessimistic nor optimistic about 2026. We have to make the best of what we have.”


Builders’ merchants are also suffering. One reported that he was selling chipboard at £7.25 a sheet in 2020, £18 a sheet in 2021, £7.60 in August 2025 and £8.40 in November.


“There are no pips left to squeeze,” he said. “Prices have to go up in 2026.” The spokesman said that 2025 was a


“Generally, our customer base is struggling but some, who invested in automation and have managed their costs carefully, did well in 2025.


He said the declining housebuilding


market had caused very tough pricing on construction chipboard products and cited general over-capacity in that market. “Housebuilding is on the bottom,” he said. “There is a lack of consumer confidence, but we remain confident enough in the UK market to continue to invest.” The spokesman added that the French and German markets are also relatively weak, while Spain and Portugal had shown stronger growth.


Above: Manufacturer processing chipboard components


year of two halves. The first six months were really good, but from June the market really quietened down and has been lacklustre ever since.


“I genuinely think there is a glimmer of light as we approached the end of 2025 and this is driven by RMI rather than new build, but there is a lack of confidence [among our customers] and the Budget left them wondering what exactly has changed. I believe that construction is definitely in recession. The market is dire.” The spokesman pointed out that there is nothing to incentivise the market: house prices are going down, he said, so there is no incentive to build, or to improve/modernise. “Nearly all our stock is priced behind inflation to varying degrees. For instance, hardwood plywood is now cheaper than it was in 2020! “However, we are expecting prices to rise early in 2026, which would be good news, but we definitely expect business to be down against Q1 2025 in Q1 2026.” Meanwhile, unusually, a timber sector report made it onto the front page of the business section of the Sunday Times on December 14, 2025, reporting that Travis Perkins had warned that prices for roofing, bricks and drainage materials will increase by ‘much more than the rate of inflation’ in January. Wood products are unlikely to be immune to that. The main reason cited was the higher labour costs after the Budget in October 2024, as well as increased material costs. Another UK chipboard manufacturer reported a “generally tough” furniture market with decorative chipboard products being under pressure.


Speaking in early January, he said: “I think the decline in construction and furniture markets is over now, but I am not expecting big growth; I think the low level of consumer confidence is short-term and that we won’t see another drop in volumes this year. “A lot of businesses in our market base are in distress and after the National Timber Group’s demise late last year everyone is being careful.” The spokesman also said that big housebuilding companies are increasingly focused on selling houses to order, rather than building them speculatively and hoping to then sell them.


He said there is an increase in pre- assembled building elements, which can be built to a higher standard and more efficiently, in a controlled environment. “Their challenge is to get the scale, and I would say the process is evolutionary, rather than revolutionary.” The spokesman admitted that managing cost inflation had been challenging in 2025 and said it was impossible to pass all the cost increases on to customers, although his company had put some price increases into effect for early 2026. “We have seen a strong increase in “hybrid specialists” in the last five years, notably in timber frame and stairs, floors and doors on a Just-in-Time basis. That is a challenge for the traditional merchants. “We are expecting a flat-ish market in 2026 and will be watching our credit exposure carefully,” he said.


“From our point of view as a manufacturer, I consider that innovation and quality are crucial for customer retention,” concluded the spokesman.


So, in conclusion, little has changed since TTJ’s last chipboard market report. Demand remains weak and margins are under extreme pressure for all sectors of the industry. I was hoping to be able to report an increase in optimism for 2026, but nobody interviewed for this report could summon much positivity on that front. The closest we get is an expectation/hope that things won’t get any worse.


www.ttjonline.com | Spring 2026 | TTJ


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