The BWF Joinery State of Trade Survey Q4 2014 indicated that joinery sales volumes have again increased, although the rate of growth has slowed. BWF Policy Executive Matt Mahony commented on the survey results:
“It is encouraging to see that most respondents reported that sales volumes have continued to rise, albeit at a slower rate of growth than previously, for the third consecutive quarter. Lower fuel costs have provided some relief, although inflation in material prices continues to drive up unit costs.
“On balance, respondents were optimistic about the year ahead, although anecdotal evidence backed up by the latest CPA market research suggests that potential clients may be delaying investment decisions until after the election, thus having an effect on order books in our sector. Feedback from BWF members also suggests that they are having to expend a lot of time and energy ensuring compliance with existing or forthcoming regulations and having to adjust their role to suit clients who may have a shortage of specialist expertise.
“As the election draws closer we will be continuing to remind politicians and political candidates of the potential they have to remove barriers that joinery businesses may encounter, such as unfair payment and the lack of adequate training. With CITB research indicating that UK construction needs at least 44,690 new recruits a year for the next four years, and apprentice completions at less than a quarter of this, politicians need to shy away from glib pre-election promises and take the opportunites they have now to address these issues head on.”
Key points from the BWF Joinery State of Trade Survey Q4 2014 included:
– A balance of 42% of joinery companies reported an increase in sales volumes for Q4 2014 compared to the previous quarter. This follows on from 54% of joinery companies reporting an increase in sales volumes in Q3. Sales volumes results showed a balance of 54% 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 36% predicting an increase in Q1 2015, and a balance of 59% predicting an increase over the next year.
– 55% of respondents had been using more than 70% of their manufacturing capacity in Q4, compared to 71% of respondents over Q3. 70% respondents indicated they would be using over 70% capacity over the next quarter, with 63% over the next year.
– 54% of respondents noted an order book between 1 and 3 months, with the 13% of respondents reporting an order book extending beyond 3 months.
– 39% listed demand as a likely constraint on activity over the next year (up from 33%), with capacity availability listed by 35%. Labour availability was the next significant constraint, at 17%
– Raw material costs increased for 75% of respondents on balance, with wages/salaries and taxes reported as having the next highest increases. A balance of 8% of respondents reported a drop in fuel costs.
– Investment in product improvement had been increased by 68% of companies on balance over the next year, with a balance of 64% having boosted investment over the previous year.
– 57% of respondents on balance were planning to boost manufacturing equipment spending with 35% having increased spending over the previous year.
The Joinery State of Trade results match those of the latest CPA State of Trade Survey which reported that construction product sales in Q4 rose once again, due to wider economic recovery driving expansion in the housing and commercial construction sectors. Product manufacturers are anticipating further growth in sales, in both the domestic market and abroad, over the next year.
Construction Products Association economist, Rebecca Larkin, said:
“The latest survey results reflect the fact that the recovery in construction is broadening from private housing to commercial, industrial and infrastructure. Growth in sales of construction products was reported by both heavy side and light side manufacturers, suggesting increased activity at all stages of the building process.
“Sales growth in Q4 was also supported by favourable exchange rate conditions, which helped drive external demand from outside the Eurozone. Furthermore, against this backdrop, more than half of heavy and light side manufacturers anticipate exports will continue to rise over the next 12 months.
“Firms also increased their headcount in the year to Q4 in response to these higher sales and reflecting the positive outlook going forward. Hiring intentions for the coming 12 months remain strong: 61% of heavy side firms and 40% of light side firms plan to increase employment in 2015.
“In addition to rising demand, manufacturers’ optimism was no doubt boosted by receding cost pressures. The downward shift in global oil prices reduced fuel costs for the majority (61%) of heavy side firms in Q4, the first negative balance recorded in the survey.”
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