Brace yourself for a bumpy ride

A key theme of the BWF 2016 programme is “Risk”. That’s not to be negative. Risk is a requirement of business, but the failure of Leaderfl ush Shapland (and a number of smaller joinery businesses) is a warning shot across our industry’s bows.

Volumes are good, but with so much uncertainty abounding, 2016 it is set to be a bumpy ride. In this environment it’s vital that woodworking businesses are alert to risk and factoring it into prices.

The latest Construction Product Association’s Trade Survey reported activity up for the eleventh consecutive quarter.

Our own Members Survey also points to increasing sales volumes (with a balance of 64% predicting a rise over the next year).

And areas like wood windows are eking share from the PVC sector. That’s good news, but it doesn’t tell the full story; margins are thin and a skills shortage is emerging. There’s little doubt that stock market volatility has impacted confi dence and we’ve seen the RMI market start to dither in its peformance. Larger contracts too have slipped in January.

This roller coaster is likely to continue as elections in Wales, Northern Ireland, Scotland and London work through and the EU Referendum approaches. Contractual risks of delays are not so much a hot potato as a hand grenade that contractors throw up the supply chain.

At the same time there’s little in the way of bank support. They also remain risk adverse, content to lend only if recipients themselves risk signifi cant personal assets.

Skills availability was listed in our 2015 Q4 state of trade survey as the most likely constraint on growth over the next year and, with the market tightening, wage increases were a unit cost infl ationary factor for 62% of respondents on balance.

The Apprentice Levy adds further uncertainty here as its impact on training providers could be catastrophic. The BWF made these points in our letter to the Chancellor ahead of the Budget, but we need to take action too. Our mission is to help members trade more profi tably and a vital part of this is helping identify and manage risk.

We scan the horizon for risk in our day-to-day activities, sometimes seeing it off through lobbying, sometimes preparing the sector for the inevitable (take our work on Building Regulations Part Q, or fi re doorset CE Marking).

Through our work in accreditation or certifi cation, or with insurers we offer direct risk mitigation options, through events and meetings, our information library and training, we add knowledge and resilience to member businesses and, through our Health and Safety Hero campaign, we look to avoid it altogether.

We’re also starting to work with colleges around the UK to become Regional Centres of Excellence and investing in new tools to support implementation of BIM and develop cost effective Environmental Product Declarations.

As we peer ahead into 2016 there is risk on the horizon, but if we can help members to recognise and manage it, then there’s also huge opportunity to be grasped as well.