Timber trade slow but resilient during COVID-19 crisis
Timber trade slow but resilient during COVID-19 crisis
ARTICLE · By Timber Trade Federation · 08 April 2020
The timber trade is facing a significant decrease in demand for products according to a TTF survey of members, with more than 60% of respondents now accessing the Coronavirus Job Retention Scheme (CJRS).
Covid-19 Survey Results – 2
Respondents reporting a ‘significant decrease’ or ‘decrease’ in their cash flow.
Respondents reporting that the crisis poses a ‘high’ to ‘severe’ threat to the timber sector.
Respondents who are now accessing the Coronavirus Job Retention Scheme.
Survey notes: This survey is only a snapshot designed to give a indication for how the industry is responding and should not be interpreted as representing all members. The total number of respondents to this survey was 31, representing a range of timber merchants differing in both size and market. Answers were collected between 27 March and 3 April 2020.
This reflects construction sites closing around the country, with the new build sector particularly impacted as major house builders such as Persimmon choose to shutter operations.
While the Government has issued calls to keep construction sites open where safe working conditions can be respected, in Scotland the First Minister has called on sites to close, as has the Mayor of London.
Respondents to the survey reflected this with ‘uncertainty’ the biggest concern for their respective companies and the industry. Many also felt the financial stability of the economy was under threat.
Most respondents have reacted positively to the Government support so far provided, with almost three quarters saying that it was helpful.
As well as the CJRS, almost half of respondents were seeking to defer their tax payments with HMRC. Only a quarter were currently seeking to access the Coronavirus Business Interruption Loan Scheme.
However, this may increase due to disruption to cash flow.
Almost 70% of respondents are now reporting changes in payment practices from customers or suppliers since the outbreak began. It is clearly not business as normal.
Individual responses from members showed most expect to be facing disruption for at minimum six months, and widespread concerns about problems being pushed up the supply chain.
Members were confident about the general resilience of their businesses. While all expected this period to be financially tight in the short term, they remain confident in the longer term.
The Government could further assist in this period by providing temporary holidays on employment taxes, or with other bills such as rent, or support to pay staff via subsidised wage scheme.
The Timber Trade Federation is also advocating for continued support when businesses do reopen, as it may be some months before there is a return to pre-COVID levels of activity.