02/05/2025
The UK Government is considering some significant amendments to building regulations which will impact BWF Members and the wider woodworking and joinery manufacturing industry. A consultation of ...
The BWF Joinery State of Trade Survey Q4 2015 indicates that sales expectations for the year ahead remain optimistic but labour availability and the cost of appropriately skilled labour is still a burden for the joinery sector. Respondents would be continuing their investment in product improvement and manufacturing equipment with order books looking encouraging for early 2016.
Key points from the BWF Joinery State of Trade Survey Q4 2015 include:
– A balance of 28% of joinery companies reported an increase in sales volumes for Q4 2015 compared to the previous quarter. This follows on from 62% of joinery companies reporting an increase in sales volumes in Q3. Sales volumes results showed a balance of 65% of respondents reporting an increase over the past year.
– Manufacturers were confident that sales volumes would improve in the next quarter, with a balance of 72% predicting an increase for Q1 2016, and a balance of 64% predicting an increase over the next year.
– 70% of respondents had been using more than 70% of their manufacturing capacity in Q4 2015, compared to 67% of respondents over Q3. 74% of respondents indicated they would be using over 70% capacity over the next quarter, and over the next year.
– 50% of respondents noted an order book between 1 and 3 months, with 23% of respondents reporting an order book extending beyond 3 months.
– Labour availability was listed as the likely constraint on activity over the next year by 26% of respondents (down from 31% in the Q3 responses), with demand down to 22% from 38% in Q3. Capacity availability was listed by 22% as a likely constraint.
– 28% of respondents on balance anticipated increasing their labour force over the next year, with 68% of respondents on balance anticipating increased labour costs over the same period.
– Wages/salaries increases were an inflationary factor for unit costs for 62% of respondents on balance, with raw material costs and taxes reported as having the next highest increase, both at 36%.
– Respondents thought energy costs had been a factor in increasing as opposed to decreasing unit costs (35% vs 15%), and a balance of 40% of respondents reported a drop in fuel costs.
– Investment in product improvement had been increased by 54% of companies on balance over the past year, with a balance of 67% to boost investment over the next year.
– 54% of respondents on balance were planning to boost manufacturing equipment spending with the same percentage having increased spending over the previous year.
BWF Policy & Communications Executive Matt Mahony commented on the survey findings:
“The survey showed a slightly lower increase in sales volumes and plenty of confidence in terms of expected sales over the next quarter and year. Although this is encouraging, the risks to businesses remain with many joinery companies finding it tricky to recruit the right staff and many contracts taking place in an unbalanced supply chain where major contractors rarely take on the risk. As well as the closure of Leaderflush at the beginning of the year, some longstanding BWF members have recently gone out of business and the picture outside the membership will be even more stark.
“Despite these risks and others such as stricter penalties for Health & Safety offences, it is encouraging to see that BWF members are ready to invest in product improvement and manufacturing equipment. One of the main challenges to the sector is labour availability and costs. Looking forward, April’s introduction of the National Living Wage, could have a critical effect on remuneration structures in parts of the country where wages are lower. With plenty of work available, and the industry coming out of a recession, it is perhaps less of a surprise to see labour availability replace demand as the most likely constraint on activity”
The findings are supported by the Construction Product Association’s latest Construction Trade Survey, which showed that activity in construction rose for the eleventh consecutive quarter in Q4. This growth was reported by firms across all areas of the industry, and was led by new building activity in the private housing, commercial and infrastructure sectors.
Commenting on the survey, Rebecca Larkin, Senior Economist at the CPA, said, “It is encouraging that growth continues to be reported across the entire construction supply chain. Overall, the near-term outlook appears positive, as firms from construction product manufacturers at the beginning of the supply chain to specialist contractors, SME builders and civil engineers carrying out work on the ground reported modest increases in enquiries, orders or anticipated sales for Q1 and the 12 months ahead. Main contractors’ order books suggest some weakness in Q1, however.
“Growth will continue to be led by work in the private housing, industrial and infrastructure sectors, but there are clearly areas that are languishing. Activity and orders were reported to be lower in public housing, which reflects the headwinds facing housing associations and local authorities amid recent policy decisions. Orders were also reported to be lower for repair and maintenance (R&M), both housing and non-housing, in Q4.
“A shortage of skilled on-site labour remains the largest threat to construction activity over the coming months, however. Half of main contractors found it difficult to recruit bricklayers, carpenters and plasterers in Q4, which continues to exert upward pressure on wage bills and raises the concern of whether expected volumes of work can be delivered.”
Have you seen the latest construction forecasts from the Construction Products Association? – BWF members can download their copy of the comprehensive Construction Forecasts Winter 2015/2016 here
