18 | Sector Market Update: Hardwood
SUMMARY
■The consensus is it’s too early to predict the impact of the budget
■The CPA predicts UK construction output will grow 2.5% next year
■Demand from staircase and window makers has picked up
■Industrial relations at US ports are causing concern
■European oak and beech supplies are stable
HARDWOOD HOPING FOR BETTER TIMES IN 2025
After a flat six months, some hardwood businesses report a slight pick-up in trade,
and they welcome the postponement of introduction of the EU Deforestation Regulation. Mike Jeffree reports
“Middle of the road” is how one trader summed up the UK hardwood market this year, echoing the sentiment of others in the business.
“Through the year it’s just been pretty flat,” said an importer. “We set our budget, and we’ve hit the numbers each month, but we’re just getting over the line. We’ve had busy weeks, then quiet ones. There’s been no pattern to it.”
Above: There is no sign of weakness on the price of European oak
The state of the market was mainly attributed to the slow-moving UK economy. The latest British Chambers of Commerce outlook forecasts a slight improvement from its previous analysis, but predicts 2024 GDP growth of just 1.1%, with government spending the main driver. It expects household consumption to increase in 2025, but sees GDP growth only hovering around 1%, before rising to 1.1% in 2026. However, one importer-distributor said after a slow summer they had seen “some improvement” in volumes in September, although margins remain under pressure. Another importer-distributor agreed June to August was quieter than the usual summer lull. But they too reported an upturn in September into October. “Merchant activity has increased, and we seem to be heading back to where we want to be,” they said. “Whether the budget reinforces the
TTJ | November/December 2024 |
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improvement or slams the brakes back on remains to be seen.”
There was general agreement that it’s too early to say what the impact of the budget will be. “We won’t see the outcomes until the medium to longer term and the budget commentary is very varied,” said an importer- distributor. “The hospitality sector is saying increased NI payments will hit their ability to invest in refurbishment, but the government is devoting an extra £1.4bn on school rebuilds. The hike in the minimum wage, fuel duty freeze and pension triple lock, in combination with lower interest and inflation rates is also predicted to underpin consumer spending.”
Government promises to boost house building to over 300,0000 homes annually were expected by an importer to impact as early as next year. “Although it will take longer to feed through to second fix work where most hardwood is used, we expect the government’s pledge to help improve industry and consumer confidence, lifting house building and repair maintenance and improvement work after some pretty depressed times,” they said.
This view tallies with forecasts from the Construction Products Association in its
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