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He added that the housebuilding statistics from the Builders Merchants Federation (BMF) showed a very slight increase year-on-year January 2024 to January 2025, but “very slight” amounted to only 2.1%. However, the same comparison for April to April showed 3% growth, but bear in mind this is for total merchant sales, not just chipboard or even panel products. Also quoted by the BMF in its weekly bulletin was the news that housing starts in Q1 2025 versus Q4 2024 were 9% down. On the upside, Q1 2025 versus Q1 2024 showed a plus 22% difference.
“It is still very challenging out there,” said the panel industry expert. “The volume of chipboard might be moving, but it is the value that is important.”
He also pointed out that government initiatives such as increased National Insurance – and the upcoming autumn Budget are holding back consumer and housebuilder confidence.
“The value of all chipboard imports in Q1 2025 was 11% lower than in Q1 2024. The 11% decrease resulted from a 12% drop in the average price of the basket of chipboard products combined with a near 1% increase in volume,” said the contact. “The 11% overall decline in value comprised a 9% decrease in the value of standard (unworked) chipboard, a 25% fall in the value of melamine-faced chipboard (MFC) and a 4% decline in the value of other assorted products.”
“In terms of sales mix, in Q1-2 of 2024, sales of 18mm exceeded 22mm (15% more),” said another timber and panels merchant. “In 2025 to date, 22mm has switched over; we now sell 15% more 22mm than 18mm. Sales of 18mm have remained static while 22mm is up 30%.”
The merchant pointed out that this is an advantage in that 22mm has a higher price than 18mm and thus turnover is increased.
He also said that his company’s chipboard sales were 15% higher in volume this year than in the same period in 2024 and that that had taken away some of the pain in the prices. However, prices are still not good, especially from an historical perspective. “In September 2021, prices peaked at £18 per sheet [due to the post-Covid ‘boom’],” he said. “In 2020, TG4 was £7.25 a sheet and today it is £7.60 a sheet. That 35p doesn’t begin to cover our increased costs.
“The price comparison from 2020 to today is awful. Basically, we’re back where we started. At the peak we were double what we’re currently paying: That’s not good for us, or the manufacturers. “This year, the market in Q1 was really quite good and at the end of May it was
still going well, but early June went very quiet, while July was patchy,” continued the merchant.
A manufacturer of chipboard said that all four of its markets: raw board; faced board; T&G; and worktops were static or falling since Covid. However, the spokesman said that demand for P5 board in 22mm was increasing as new build projects increased to some degree. “But it is all a bit subdued really,” he said.
“We’ve had some months where sales have gone up but June saw lower sales again. All- in-all, the market is relatively static. Prices cannot fall any further.”
He said that P2 raw chipboard sales have seen a slight upward trend in price, which he thought may be a sign that the market is starting to grow and had heard of some price increases in the lowest prices, which is normally a good sign, he said. He found that the melamine-faced chipboard market was mostly static but had mixed fortunes. “We need the whole housebuilding market to increase, but when it does, furniture will be a long way behind,” said the manufacturer. “Remodelling and refurbishment are also still static. People are reluctant to commit money at the moment as they don’t know what’s round the corner – like the autumn Budget – everybody is waiting to see what will happen.”
The manufacturer said that he felt demand and supply were more or less in balance in the summer, but prices desperately need to be increased.
Another chipboard manufacturer said that it had been another quite challenging year and that from his company’s perspective, the flooring market had been about 6-7% down in January to June, which he said reflected the quiet housebuilding market. His factory supplies about 30% of its production to construction and 70% to the decorative market.
“The decorative side is doing OK and has
taken quite a lot of the market share,” he said, “but broadly speaking the furniture market is down 4-5% on last year.
“One thing we have seen more and more in the last two or three years is the merchants being pushed out of the new housebuilding market,” continued the manufacturer. “In the last 10 years, there has been a rapid acceleration in specialist companies – ‘hybrid’ businesses manufacturing flooring cassettes, stairs, pre-hung door sets and so on, craned in on-site and these hybrid manufacturing/ distribution businesses are dominating the market, aided by on-site skill shortages. “But it is a challenging market and everybody is fighting for volume in the construction sector and there are fewer housing starts.”
“Our furniture supply side has seen a similar level of reduction in activity, driven by the poor UK economy,” said the spokesman. “The big, strong, well-financed groups such as Howdens and Wren continue to expand, targeting growth in market share, and they are performing well. However, a number of small to medium furniture manufacturers have gone into administration. “Looking ahead, I see some green shoots,
but mixed messages from the market. The housebuilders are optimistic about the mood music from the government, but where are the concrete measures to improve the industry?” The spokesman pointed out that there is a lot of interest from the government in timber frame house construction in terms of its carbon footprint and carbon sequestration and said that as an industry they are telling the government to plant more trees in commercial forests. He suggested that Sitka spruce should be a key species in this reforestation.
“I am not negative about the fundamentals of our sector,” he continued. “We’re continuing to invest and we’re making a noise about the fundamental strengths of our sector – like the carbon positives and embodied carbon in buildings.”
“I am confident that we will see an improvement in the market,” said another chipboard manufacturer. “It’s tough and volumes are down, but I feel positive about the future.”
The raw material supply for panel factories is always a competitive area and some panel makers are nervous about biomass initiatives and about government talk of using biomass to create aviation fuel. Government investment in such projects is certainly not in the interests of panel manufacturers as they compete for wood raw material and see their costs rise as a consequence.
Resin costs are apparently more stable and are anticipated to remain so, said the manufacturer.
Another chipboard manufacturer with a strong presence in the UK market described the market as “flat but stable” and he saw it remaining that way but “hopefully” picking up in Q2 2026. However, he was the second person spoken to who said that July saw an improvement in the repair, maintenance and improvement market.
The mill is currently operating at what the
spokesman called a “comfortable capacity, with some months better than others”. His company mainly produces P2 grade for the furniture market.
On the prospects for pricing, he felt that, if demand were to increase slightly, a minimal 3-4% rise in price was possible. However, like everybody else, he sees little or no evidence of a market response to the government’s call for greatly increased housebuilding. ■
www.ttjonline.com | September/October 2025 | TTJ
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