The BWF Joinery State of Trade Survey Q1 2014 indicated that there had been a slight dip in joinery sales volumes from Q4 2013 to Q1 2014, but companies are optimistic that this will be offset by improved sales figures in Q2.
BWF Policy Executive Matt Mahony commented on the survey results:
“Although respondents reported a quarterly decline, the year on year figures have been more promising, showing a balance of 6% of respondents indicating an increase in sales over the last year.
“But these rather low-key results are not a huge surprise given the poor weather which stretched well into February and resulted in the region from Devon to Kent and up into the Midlands suffering the worst winter downpour in more than two centuries. This would undoubtedly have had an effect on activity during the first three months of the year.
“The exceptional nature of these conditions appears to have allayed fears that demand has been slipping back and we are still seeing confidence that sales volumes will improve, especially in the next quarter (Q2 2014), where a balance of 56% of respondents have predicted an increase. Anecdotal evidence from member companies has also suggested that results for Q2 will be more promising, at least in terms of sales volumes. Perhaps of more concern is that joinery businesses are seeing continued pressure on their profit margins and having to put up unit prices to counterbalance further increases to raw material, fuel and energy costs.”
Other construction industry reports such as the CPA-compiled Construction Trade Survey, found that conditions year on year depended heavily upon the sector contractors had been working in. Contractors in private housing found that output continued to rise again. 57% of contractors, on balance, stated that sector output rose in Q1 compared with a year ago, a considerable rise from the 20% balance reported in 2013 Q4. Output in commercial, the largest construction sector, rose for 22% of contractors, on balance, a rise from the 8% balance reported just three months ago.
However, while contractors experienced rises in activity in all new work sectors, it was not good news in all sectors. Repair and maintenance work suffered in Q1. 11% of building contractors, on balance, reported that housing repair and maintenance output fell in Q1 compared with a year earlier. Private housing repair and maintenance work suffered in the first three months of the year.
Key points from the BWF Joinery State of Trade Survey Q1 2014 include:
– A balance of 6% of joinery companies reported an decrease in sales volumes compared to the previous quarter after successive increases (Q3 2013 and Q4 2013) reported by 27% and 43% of respondents. Sales volumes results showed a balance of 6% of respondents reporting an increase over the past year.
– Manufacturers also remained confident that sales volumes would improve in the next quarter, with a balance of 56% predicting an increase in Q2 2014, and a balance of 44% predicting an increase over the next year.
– Half of respondents had been using more than 70% of their manufacturing capacity over Q1, down from around two thirds although respondents indicated they would be using more of their capacity over the next quarter and the next year.
– 17% of companies reported a current order book of future work extending beyond 3 months, a small decrease from the Q4 2013 results.
– 50% listed demand as a likely constraint on activity over the next year, with one third of respondents listing capacity as a potential constraint.
– Raw material costs increased for 83% of respondents, with fuel and energy costs also putting inflationary pressure on unit prices.
– Investment in product improvement looked likely to increase over the next year, with a balance of 44% having boosted investment over the previous year and the same proportion planning to increase investment over the next year. 39% of respondents were planning to boost manufacturing equipment spending.
BWF members are able to log in and download the complete survey report.
