BWF members split on likelihood of sales growth

The most recent BWF State of Trade Survey indicates that a more difficult than expected last quarter has quelled optimism in the joinery manufacturing sector, leaving respondents split as to whether sales volumes are likely  to increase in the coming months.

The most striking conclusion to be drawn from the results of the BWF’s latest State of Trade Survey (Q2) is that the guarded optimism of the early part of the year now appears to have dissipated.

Results from the previous (Q1) survey indicated that although 9% of respondents, on balance, had increased their sales volumes over the last quarter, a balance of 37% were expecting an increase over the next quarter, with even more expecting an increase over the coming year.

The latest survey results suggest that this buoyancy has now gone, with a balance of only 9% of respondents reporting a quarterly increase in sales. This has left respondents divided as to whether sales volumes will increase over the next quarter, with the same number foreseeing an increase as those predicting a decline, and a balance of only 3% expecting an increase in sales volumes over the next year.

Otherwise, the results have indicated that many of the same issues and problems remain for joinery manufacturers. Respondents again indicated that high energy, fuel and raw material costs continue to be a drain on business, pushing unit costs up and ensuring that sales margins remain tight. Order books for future work still rarely extend beyond 3 months. With manufacturers having to work hard in a competitive market place, BWF members are planning to increase capital investment in a number of areas including e-business and manufacturing equipment, whilst maintaining levels of spending on product improvement.

Anecdotal evidence from respondents suggests that a lack of consumer confidence is keeping demand low but the recovery of the private housing sector has brought increased sales prospects to some manufacturers.

BWF Policy Executive Matt Mahony commented:

“The survey results are, unfortunately, representative of what has been labeled a ‘coordinated decline in optimism across the construction supply chain’. The figures are by no means disastrous, with areas of growth reported, but there appears to be growing frustration that the industry is continuing to exist hand-to-mouth.

Given the way that construction figures are continuing to drag down GDP, the government needs to formulate workable policy measures capable of stimulating growth in construction, as opposed to providing more empty rhetoric.

This would give the coalition an opportunity, not only to restore policy credibility, but also to generate much needed economic activity and provide genuine employment opportunities across the UK.

Projects such as the Olympics, of which we are delighted with the contribution the joinery and timber industries have made, indicate that the construction sector is capable of delivering housing and infrastructure needs in an environmentally sustainable and affordable way. This potential needs to be harnessed if the UK is to build for the future.”

A wide range of BWF members responded to the survey, with a number of different product types and company sizes represented.

BWF members will be able to view the full 2012 Q2 report simply by logging in to this page below.