Helen Hewitt, BWF CEO discusses the challenges industry is facing with the high demand in the timber supply chain, and what effects this is having on BWF members.
The Builders Merchants Building Index (BMBI) was recently revealed by the Builders Merchants Federation. The report contains data from GfK’s ground-breaking Builders Merchants Panel, which analyses data from over 80% of generalist builders’ merchants’ sales throughout Great Britain. GfK’s Builders Merchant Point of Sale Tracking Data sets a gold standard in reliable market trends. Unlike data from sources based on relatively small samples or estimates, or sales from suppliers to the supply chain, this up-to date data is based on actual sales from merchants to builders and other trades. It’s therefore a very good proxy for housing RMI. The monthly series tracks what is happening in the market month by month and includes an in-depth review every quarter.
The report revealed an increase of 18.2% in sales of timber and joinery products in February 2021 compared to the February 2020 which is far ahead of all other product types. The total Builders Merchants’ February sales value is 2.3% higher than February 2020 and the demand for timber is still set to remain. We also know that timber and panel imports are 12% higher in January 2021 than January 2020, so the recovery in the import volume during the second half of 2020 has helped move this increase along with timber being imported into the UK at high levels.
We know from the data supplied in the BWF Home Improvement Index that the consumer demand for products is likely to remain high throughout 2021 and see that the CPA State of Trade Survey Q1 cites 41% of heavy side and 48% of light side firms reported an annual rise in sales in Q1. So it is clear this tend is set to continue for the foreseeable future. It also states in the CPA State of Trade Survey Q1 that a record proportion of manufacturers have cited material supply as a key constraint to the 12-month sales outlook, with 71% of light side firms anticipating a rise, the highest balance in six years, which is reflective of our own membership concerns.
It is clear the industry is facing increase in demand of a high magnitude which is on a global scale, not just UK specific. All of these factors are leading to the cost for materials increasing on what feels like a weekly basis, impacting on our members ability to service their own customers. Raw material costs remain the key driver of cost inflation and feel it is important for members to know that timber is not the only material experiencing global supply imbalances. We are seeing regular examples of other commodities being impacted in exactly the same way and this will continue for sometime.
Sadly, this is a challenge we will be facing for sometime, which means it is important to be open and transparent with your customers and to continue to develop your relationships with your suppliers to ensure they are able to service your own business requirements. We would recommend you revisit your Terms and Conditions too; every little helps to protect your own trading agreements. Everyone is in the same boat at the minute right across the manufacturing sectors with no one material exempt from challenges.
We know members are frustrated by this situation and we will continue to monitor it as much as we can. We will continue to work across the supply chain with our fellow trade associations. As a member Construction Leadership Council (CLC) Product Availability/Brexit Movement of Goods and Materials Committee we are able to vocalise our members concerns on the situation at a national level which feeds directly back to the Department of Business, Energy and Industrial Strategy (BEIS) who are monitoring the situation.
We will be in touch if we have any further detail.
