Some continuing timber demand from UK construction sector

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In the UK, according to the Timber Trade Federation (TTF), some importers, distributors and merchants have suspended business while others are operating at much reduced levels. Some demand continues from the UK building sector, which has been one of the first sectors allowed to reopen subject to new health and safety rules.

However, the latest Construction Purchasing Managers Index (PMI) for the UK, published by IHS Markit, revealed the sharpest decline since the survey began 23 years ago, falling from 39.3 in March to only 8.2 in April as activity drew to a halt due to the virus outbreak March (a score below 50 indicates contraction).

A big question in the UK timber industry currently is how requirements for social distancing will impact future construction output. A briefing circulated by Barbour ABI suggests that, even as the lockdown is eased, the number of workers on UK construction sites could be as low as 15% of normal figures in some cases, leading to increased costs and build times over the next year.

Meanwhile, according to the TTF, DIY sales in the UK are holding up, which is attributed to consumers undertaking repair and refurbishment projects while off work. Garden centres in the UK will be allowed to reopen from 13th May in one of a range of measures to gradually ease the lockdown rules as COVID-19 death rates have declined.

However, with the numbers of new COVID-19 cases and death rates still high, the process of easing the lockdown is expected to be very slow in the UK. The government has emphasised that lockdown measures may be reintroduced if any signs emerge of a second wave of the virus.

UK timber importers say they have asked overseas suppliers to push back orders by 30 to 60 days but there is still concern about the build-up of landed stocks at ports, with companies unable to accept cargoes as their own storage is full.

A TTF members survey published on 1st May, while emphasising that the UK timber supply chain is well stocked overall, also showed that garden products and plywood are product categories where there may be shortages. This survey indicated that, compared to last year, respondents’ sales fell 33% in March and by 66% in April, while 69% reported their cash flow had decreased significantly.

Some slightly more positive news emerged from the UK Confederation of Timber Industries (CTI) latest survey of the state of the industry published on 12 May. This highlighted that almost all UK timber businesses expect to reopen in some capacity before the end of the month. The third of businesses which never closed will be re-joined by the rest of the respondents, with most (99%) having either reopened or planning to during May.

The CTI survey also showed that while only 12% of the industryare currently operating at maximum capacity, there is confidence that businesses can quickly ramp up productivity. Respondents said that, if quarantine measures were lifted, and in light of recent Government advice on returning to work, 54% of businesses said they could return to full capacity immediately, and a further 34% in less than a month.

The CTI survey indicated that manufacturing was the most affected sector in the timber supply chain, with these respondents far more likely to have closed for a period than sawmillers, merchants or other traders. Wood product manufacturers were also concerned that lack of access to personal protective equipment could hamper the return to work.

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