Markets: Fencing & Pallets | 21


charges yet but if he found he needed to protect his profit margins, then he would raise prices. A fencing supplier said that despite costs rising, he felt the fencing industry was generally reluctant to increase its own prices. “They want to keep busy, to keep the bulk and momentum going, but that does not help towards costs and there could well be more casualties this year,” he said, adding that suppliers of fixings to the fencing industry were raising their prices by 8-15%. A good indicator of the extent to which margins were being squeezed was the company’s March VAT return, the supplier said. Last year the bill was £80,000; this year it was £50,000 and all down to lower overall margins, he said. A fencing manufacturer and supplier believed the full effects of the war in Iran had not been felt yet. His company was absorbing a 45% increase in fuel costs but this was unsustainable. He might increase his current delivery charge or apply a fuel surcharge. He had earlier considered introducing a 2-2.5% product price increase but held off until the market improved. Now, with the sudden and unexpected rise in costs created


Some fencing suppliers are predicting 2026 to be an average year


by the Iran war, he intended to impose a 3-4% increase soon.


He was also mitigating higher costs by not replacing a few staff members who had left the business.


For his company, demand so far this season was on a par with last year, which was at the same lower level experienced following the frenzied market during the Covid pandemic. “We haven’t seen any growth for three


years. Generally, demand is not there for the product,” he said, adding that any potential uplift this year would be stifled by economic uncertainty and the slower housing market. “It’s going to be a very average year. This is our busiest quarter but we are not rushed off our feet which we were in previous years and the weather is dry this month. Better weather should get people in their gardens, and I don’t think people are rushing out there,” he said.


ECONOMY WEIGHS HEAVY ON PALLET TRADING


Trading conditions for pallets are tough, but the long-term picture is strong, says TIMCON general secretary Stuart Hex


Economic uncertainty, timber supply constraints, rising fuel and transport costs, and growing pressure from forthcoming legislation have created some of the most difficult trading conditions for the UK wood pallet and packaging sector in recent years, the Timber Packaging & Pallet Confederation (TIMCON) says. Businesses are facing a generally volatile market, where weak manufacturing demand and generally supressed investment continue to limit activity across parts of the economy. Meanwhile, supply chain disruption and geopolitical instability are placing further pressure on costs and availability. A weakness in UK construction activity is having a knock-on effect on pallet demand, particularly in building


materials and timber product imports. Recent UK construction PMI figures show ongoing contraction in housebuilding activity and generally low commercial construction output. The pallet and packaging sector faces a coming wave of new regulation – including the Packaging and Packaging


Waste Regulation (PPWR), Extended Producer Responsibility (EPR), and European Timber Regulation (EUTR), linked to sustainability, reducing waste, and increasing reuse – and which are expected to have significant implications for manufacturers and users. PPWR is expected to be enforced from August this year, applying to all forms of packaging, including wooden pallets, cable drums, export packaging, and lightweight packaging. Packaging will increasingly be required to meet ‘design for recycling’ criteria, while transport packaging reuse targets are expected to rise significantly by 2030 and beyond. Industry representatives have warned against applying recycling criteria developed for plastics directly to wood packaging, arguing that wooden pallets already perform strongly within circular economy models because they can be repaired, reused, and recycled multiple times. EPR requirements are also expected to increase reporting obligations for using packaging in the UK market. The UK government published guidance on packaging data collection earlier this year. Meanwhile, economic recovery in the EU, Asia, and the US may cause a shortage of timber as demand begins to


outstrip supply, putting pressure on prices and availability. The impact of the loss of Russian timber for European supply chains is still being felt, while large volumes of timber


created by recent storms may also impact on the market. According to TIMCON, despite the challenges, the long-term demand for wooden pallets remains relatively strong, thanks to growth in logistics, warehousing, food distribution, and e-commerce all supporting demand – as well businesses seeking more sustainable and reusable transport packaging solutions.


www.ttjonline.com | Summer 2026 | TTJ


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