The climate for business is definitely getting warmer, although it’s still nowhere near reaching the superheated state it attained pre-recession. A mild winter across Europe has meant that mills in colder regions have been able to continue producing, and in Sweden, beneficial currency rates are returning, bringing some degree of relief to producers. Add to this the apparent uplift, albeit from a very low level, of housebuilding, maintenance and repair across Britain, and softwood business prospects for spring 2014 look more favourable than for some time.
While British mills have been busy, with demand for fencing and related products pushed up by the wild weather, softwood imports are also on the rise. Order books at big European softwood mills are looking good for the first quarter, though there’s an acknowledgement that potential shortages in some specifications may occur in the coming months.
Indicators of activity rising in the builders merchant sector are also positive, so on balance, timber producers should have a better year ahead of them.
Yet two factors still sit at the back of my mind, lacing my personal optimism with a dose of good old-fashioned caution.
Firstly, will recovery continue in the construction market, or is it simply being stoked by house prices and interventions such as the government’s Help to Buy scheme? Secondly, will solid wood products see the benefit of a return to growth in the RMI (repair, maintenance and improvement) markets, or will growth be centred on wood composite products or, more starkly, substitute materials like recycled plastics?
While housebuilders are certainly increasing their output, will the economics of the housing market itself allow enough new buyers into the system to spark more widespread renovation and repair on which so much of our industry depends? Solid wood will have to compete strongly for builders’, architects’ and householders’ attention, and to offer the same levels of data for building information modelling as produced by competing material industries.
Softwood products must also look further than their physical quality to achieve growth in market share. The uplifting qualities of their natural aesthetic, their potential to mitigate some of the problems of ‘sick building syndrome’, and their contribution to the life cycle of buildings and the environment, all need to be brought to customers’ attention. This demands further action across the wood supply chain – everyone, no matter what size their business, has a role to play.
As growth starts to return, so business becomes more competitive for everyone. In the softwood sector, service is the key battleground of the present, and of the future. Many softwood suppliers sell broadly similar products, for similar purposes, and to a mature market. To avoid our valued wood resources slipping back into the anonymity of commodity trading here in Britain, we must find new ways to add value to our customer relationships.
Producers will continue to supply markets like Britain for as long as the value placed on softwood resources is relatively reciprocal between producer and seller. Yet we must all remember how much today’s softwood resources are in demand by global markets, not just our own.
