The long-term future for timber construction remains bright despite turbulent times ahead for 2023.
The timber supply chain – alongside the wider construction industry – is facing stormy weather amidst gloomy economic projections for the UK in 2023, as recession looms and the cost of living pushes prices higher.
But despite most economic forecasts acknowledging the challenges ahead, the long-term future of timber remains bright thanks to timber’s status as a key low-carbon material.
Nick Boulton, Timber Development UK’s head of technical and trade, explains how the timber supply chain has reached this point: “Volumes of timber imports into the UK have fluctuated over recent years, both during and immediately after the Covid pandemic.
“But in recent months, loss of consumer confidence has become the main cause of reduced demand for timber and other building materials, in the domestic RMI market. We did see growth during Q1 of 2022, until June when it started to fall in line with decreasing consumer confidence, exaggerating the usual summer slowdown in the softwood market.”
Despite these fluctuations, Nick says the production of UK-grown timber in 2022 was relatively stable, and believes that market prices for timber, which have also fluctuated in recent years, will see stability return once more.
Nick says: “The TDUK Structural Importing Price Index highlights that, pre-Covid, the price of timber remained relatively stable for many years. We believe in time the market will return to more stable pricing, albeit likely at a higher average price point than previously.”
Uncertainty lies ahead
The challenging task of predicting what lies ahead for timber and the wider construction industry falls to the Construction Products Association (CPA). Speaking recently at the TDUK Global Market Conference, the CPA’s Economics Director Professor Noble Francis, began by acknowledging how difficult it currently is to forecast accurately for 2023 considering the recent political and financial chaos.
“No-one knows what’s definitely going to happen, and there’s real uncertainty around the 2023/24 forecasts,” he said.
Despite UK GDP climbing back to pre-Covid levels at the start of 2022, it fell once again during the second half of the year, and Noble forecasts further contraction at the start of 2023. The CPA forecast suggests that interest rates will peak somewhere around 4% in 2023.
“A projected fall of 1% GDP in 2023 is worrying, but not as catastrophic as the economy saw during the crash of 2008, when GDP fell by 5%,” he says. “I’m expecting the recovery in the construction sector to begin in 2024.”
Light at the end of the tunnel
Turning to the timber sector in particular, Noble believes the long-term future is bright. He says: “If the government wants to build 300,000 homes a year, as well as decarbonising the heat network, that means we will need to build more energy efficient homes and carry out lots of energy efficient retrofit work on existing buildings – all of that is good news for timber.”
TDUK CEO David Hopkins agrees that there is still room for optimism. He says: “The last couple of years have thrown some considerable challenges at our industry, with the pandemic, invasion of Ukraine and political instability placing the market on a rollercoaster.
“However, against this gloomy outlook, there is room for optimism on a policy level, with timber increasingly being recognised as a sustainable solution for the built environment. Through TDUK we are creating an opportunity to significantly advance timber’s position in the market as we build strong connections between suppliers and specifiers.”
TDUK members can access regular market data, industry statistics and information on trends and imports of a wide range of timber species online at www.timberdevelopment.uk
- This article was originally published in Issue #01 of Supplying Timber magazine.