New BWF State of Trade Survey shows joinery sales volumes increasing but margins remaining tight

The BWF State of Trade Survey has indicated that sales volumes for joinery manufacturers have increased over the last year, with a further increase expected over the next 12 months.

Unit costs have also increased, but a major contributor to this has been the increase in fuel, energy and materials prices which has been putting pressure on manufacturers and making it difficult to win contracts with any significant profit margin.

The market remains very much hand to mouth, with output constrained by a lack of demand and only a small percentage of respondents having order books going more than 3 months into the future. The private housing sector was listed as being the most important market sector for more than half of respondents.
Anecdotal evidence suggests that opportunities have arisen in niche markets and on high end projects.

Companies have had to work hard in a competitive market place to increase their client base and demonstrate that they can supply the best quality products. This is reflected by high capital investment in product improvement, e-business and equipment.

There has, however, been a general concern that competitors outside the BWF have been undercutting BWF members by cutting corners in terms of compliance with building regulations or Health and Safety requirements.

BWF Chief Executive Iain McIlwee commented:

“Trading conditions remain difficult and we have seen some big names fall out of the woodworking marketplace this year as a result, but amidst the uncertainty it is heartening to see some optimism out there.  The survey indicates that manufacturers are starting to consider increased levels of investment and those operating at virtually full capacity is increasing.  Our focus as a Trade Body must be on maintaining and developing the support we provide to our members and keeping the pressure on government to recognise that the woodworking sector is an important part of the manufacturing base in the UK and reduction in regulatory burden and better access to finance are key to ensuring that UK manufacturers survive to support the upturn when it finally comes.”

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 Q1 report simply by logging in to this page below.