UK and European timber suppliers’ decision to cut production in light of softening demand could lead to shortages, a trade body has warned.
Although there is currently a “plentiful supply of timber” in the UK, contractors could be hit by a lack of material if demand was to suddenly return, according to the Construction Leadership Council’s product-availability working group.
“This could lead to gaps in the supply chain if demand [then] rises suddenly,” the group warned in its latest product-availability statement. But it added that availability would not become a “major issue” if demand held at its current levels.
Market uncertainty was a key reason for a fall in the volume of timber imported to the UK, according to a report released this week by trade association Timber Development UK (TDUK). The uncertainty had combined with high levels of stock in the UK to push down imports, according to the group.
Timber has also been hit by the cost of living crisis, with TDUK’s head of technical and trade, Nick Boulton, saying the crisis had “begun to bite our sector”.
“High energy prices [are] harming consumer confidence and reducing demand for home improvements,” he said.
Boulton predicted that demand for timber would increase “significantly” in the long term due to its potential environmental benefits as a building material.
The CLC release also suggested that inflation was hitting energy-intensive materials such as cement and bricks.
Although the warm autumn this year lowered demand for gas, prices could rise again amid a drop in temperatures this winter, the trade association warned.
Insolvencies in the industry have also remained high, with 19 construction firms falling into administration in October. The rate is, however, markedly lower than the 31 companies that went under in February, which was a record high.
The CLC report put the high number of administrations down to a mixture of reasons, with some firms that were propped up by governmental COVID-19 support failing once the funding came to an end. It also cited contractors’ struggle to keep to fixed-price contracts at a time of high inflation and reduced cashflow.
“Collaborative risk-sharing will be key to preserving industry resilience and capacity moving forward,” the CLC statement said.