The BWF Joinery State of Trade Survey Q3 2014 indicated that there had been a further increase in joinery sales volumes from Q2 2014 to Q3 2014, and manufacturers are optimistic that this will continue. BWF Policy Executive Matt Mahony commented on the survey results:
“Broadly speaking we are seeing very similar results to the previous quarter in terms of capacity used and work in the pipeline. Again more than half of companies are working at over 80% of capacity with the vast majority of firms – almost four out of five – reporting order books stretching beyond one month.
"Optimistic sales predictions relating to Q3 from the previous survey have been more or less matched with results, although some companies have expressed concerns that Q4 growth is partly dependent on continuing good weather and that availability could emerge as a restricting factor. Raw materials, energy costs and salaries continue to be major factors in increasing unit costs.
"With an election coming up in 6 months, we will be pushing for more from government and expressing the need for cross-party consensus to cut through the political dogma and deliver the clarity and productivity the country needs for sectors such as housing and infrastructure."
Key points from the BWF Joinery State of Trade Survey Q3 2014 included:
– A balance of 54% of joinery companies reported an increase in sales volumes for Q3 2014 compared to the previous quarter. This follows on from 63% of joinery companies reporting an increase in sales volumes in Q2. Sales volumes results showed a balance of 58% 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 49% predicting an increase in Q4 2014, and a balance of 58% predicting an increase over the next year.
– 71% of respondents had been using more than 70% of their manufacturing capacity in Q3, compared to 74% of respondents over Q2. 76% respondents indicated they would be using over 70% capacity over the next quarter, with 73% over the next year.
– 51% of respondents noted an order book between 1 and 3 months, with the 26% of respondents reporting an order book extending beyond 3 months.
– 33% listed demand as a likely constraint on activity over the next year (up from 27%), with capacity availability at 26%.
– Raw material costs increased for 77% of respondents on balance, with energy costs and wages & salaries reported as having the next highest increases.
– Investment in product improvement had been increased by 60% of companies on balance over the next year, with a balance of 57% having boosted investment over the previous year.
– 64% of respondents on balance were planning to boost manufacturing equipment spending with 52% having increased spending over the previous year. E-business was also likely to see significant continual investment.
The Joinery State of Trade results come hot on the heels of the latest Construction Trade Survey which reported that construction activity rose in Q3, the sixth consecutive rise in activity. Private housing growth slowed with 35% of firms, on balance, reporting that private housing output rose compared with 41% in Q2, but growth levels increased in all other sectors, including private commercial. Firms across construction, from SMEs to the largest contractors, reported increased output in the third quarter.
Commenting on the survey, Dr Noble Francis, Economics Director at the Construction Products Association, said:
“Construction firms reported growth once again in the third quarter of 2014, the sixth consecutive rise in activity for the first time in six and a half years. Activity rose in the third quarter according to 60% of contractors, on balance.
“Construction firms also reported rises in forward looking indicators such as orders and enquiries, which clearly indicate that activity will rise throughout 2015. A rise in Q3 order books in private housing was reported by 15% of contractors, on balance. A further 13% and 12% of firms reported rises, on balance, in orders books across private industrial and public non-housing (education and health) respectively.
“The only dark clouds in construction were seen around margins, which continued to be hit hard. Construction firms had to suffer rises in costs in Q3 once again and although tender prices also rose in Q3, the benefits of these tender price rises are only likely to be felt when the work from these contracts occurs in 2015.”
You can hear more from Noble on the recovery in construction by watching his interview by Barbour ABI, the chosen provider of industry data and indicators for Government bodies including the ONS. The interview can be seen via YouTube here.
