2017 - The year for living positively20 February 2017
In spite of most forecasters expressing degrees of gloominess about the UK economy generally, 2017 could turn out to be a good 12 months for the UK forestry and wood processing sector, writes the chief executive of Confor Stuart Goodall
The majority economic opinion is that the Brexit vote effect will begin to bite this year, adding to worries over a squeeze on personal incomes, hit by increasing inflation driven by a weak pound.
However, a weak pound is generally good news for the UK sector.
And it has been recently, though mitigated by strong Irish imports at very competitive prices and imported C16 graded material being offered in direct competition with domestic producers.
Sawmill order books remain generally good and the significant investment made by mills over recent years means they are well placed to deliver on both quality and service in 2017.
There are positive signs ahead on house building activity too.
The UK construction industry reported the fastest growth in new orders in almost a year in December 2016.
At time of writing, parliament was to debate and provide its approval to sign Article 50, with all indications that there is a clear Parliamentary majority to send a letter to Brussels saying “We’re off, it’s been (insert your sentiment here)”.
What does that mean for UK producers?
Well, some things may change little in the short term. Environmental regulations are set to be carried into UK law through the proposed ‘Great Repeal Bill’ and I cannot believe that Defra will tinker much, as it will have been shrunk to half its size.
There may be an opportunity for the UK to adapt the regulation of construction products to allow UK forest products to be much more widely used across construction.
But again will there be civil service resource and indeed the political will for change?
Most likely the biggest and quickest impact will be on new UK tree planting.
Scotland has recently committed to raising its annual target to 15,000 hectares by 2025 and the other countries are slowly setting about lifting their productive softwood planting.
A major hurdle has been farming subsidy through the Common Agricultural Policy.
Whichever shade, severity, colour or flavour of Brexit deal we secure, the UK will leave the CAP.
There is an opportunity for a renaissance in tree planting, as long as farmers can be enticed away from sitting on their hands – a common practice when change to subsidy regimes are afoot.
Integrated farming and forestry is quite common on the continent. Ironically, leaving the EU may just provide the conditions to encourage farmers to embrace it in the UK.
Pressed for a prediction, I think 2017 will be a good year for UK sawmilling and panel producers, with the wider forestry sector also expected to benefit from their success.
This is good news when set against a backdrop of increasing availability of UK wood over the next 15 years.
The challenge will be to ensure that we also secure the longer-term future for the whole industry through much greater levels of tree planting both this year and far beyond.