Official numbers show heavy COVID-19 impact

Official numbers show heavy COVID-19 impact

BLOG · BY TTF CEO DAVID HOPKINS · 19 June 2020

While on the ground the impact of COVID-19 might seem evident, it is only in the last few days that official figures have been revealed. TimberTrends have provided us with a provisional analysis of timber imports, which shows an overall 30-35% drop in import volumes in April 2020 as compared to April 2019.

Across individual product categories this reduction varies significantly. Products with healthy local domestic production saw imports drop most significantly, as could be expected, with Particleboard falling by 60-70%, MDF by 50-60%, and OSB by 40-50%. On the other hand, Hardwood and Hardwood Plywood dropped by between 40-45%, and Softwood, which is by far the largest import category for timber in the UK, saw 30-35% reduction in volume.

The only product category in which import volumes in April 2020 are shown not to be affected is Softwood Plywood. However, this category was buoyed by the coniferous plywood quota. Were this not the case, a 40% fall in Softwood Plywood imports would have been the likely result.

While Government schemes have been sustaining businesses and preventing redundancies, Travis Perkins this week announced they were set to shed 2,500 jobs in the UK. This represents a 10th of its workforce, and the closure of around 165 stores. Likely, they will not be the last to downscale parts of their business in the face of challenged demand – but much remains up in the air as construction adjusts to social distancing, and economic stimulus measures, such as £100bn in bond buy backs by the Bank of England announced today, continue to be rolled out.

Falls in timber import volumes were today mirrored in the Building Merchants Building Index, which showed value sales in April 2020 down 76.3% compared with April 2019. The index revealed ‘all categories saw heavy falls, with Workwear & Safetywear least affected (-60.2%), and Tools (-90.0%) hit hardest. Kitchens & Bathrooms (-86.8%) and Decorating (-81.6%) were also particularly weak’. Timber and Joinery products did not fare much better, dropping by 75%.

This fall in sales shown in the index is roughly in line with the Member Survey we conducted at the beginning of April, which predicted a 66% reduction in sales in April 2020 as compared to April 2019.

Despite drops in imports and sales, our surveys and reports with members continue to show that timber stocks are more than sufficient to meet demand. Yes, there are pockets of shortages, and longer lead times on certain products, such as decking, fencing and garden products – a category which saw unprecedented demand when the furlough scheme kicked in alongside good weather- but the level of supply for commercial construction remains healthy.

The construction industry can be assured that ultimately the timber supply chain is sufficiently diverse and flexible to meet the demands of the market. As demand comes back more evenly across the economy, supply will balance out to meet it.

What is important over the coming months is that we continue to align timber with the future of construction and the Construction Leadership Council Roadmap to Recovery. Just this week we contributed a submission to a Department for Business, Energy & Industrial Strategy on business recovery, which reiterated the importance of timber to manufacturing and decarbonization.

Timber is a high-tech, innovative, and sustainable industry. While the short term may be difficult, I am confident we will come through the other side of this crisis stronger than ever.

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