Summary
• The number of BWF members in administration or liquidation is higher than usual.
• Some joinery customers are shelving projects or pushing for price cuts.
• Economic pressure is most apparent in the newbuild sector.
• Many architectural joiners are still reporting decent levels of enquiries.
• Steel prices have pushed up the price of fasteners and fixings.
• Window manufacturers report growing interest in window energy ratings.
For the majority of UK joinery firms, the business outlook appears murky for the remainder of this year. Many of their customers are responding to current economic uncertainty either by shelving projects or by pressing suppliers to cut their prices at a time when the joinery companies themselves are at the mercy of spiralling costs. As a result, joinery business margins are already under pressure and are expected to become even more squeezed over the coming months.
Even among those joinery firms with a pleasing volume of work on their books at present, most are preparing themselves for tougher times ahead. For example, a spokesperson for an established window and door producer noted record sales for his company towards the start of this year but added: “Orders from housebuilders are now taking longer to come through and are being broken down into smaller elements. This reflects a trend towards building to order rather than building for stock.”
For the moment, the squeeze is most apparent in the new homes sector. With some people unable to obtain the necessary finance to move home and others not prepared to sell their properties at lower prices, the market has entered a period of relative stagnation.
Getting tighter
While some joinery companies are still reporting good levels of demand from the bespoke domestic replacement and contractor-led project sectors, “the general sentiment [among joinery firms] is that it’s going to get very difficult”, a senior industry figure said this week. “For a lot of companies, it’s already very tight and getting tighter.”
A higher-than-average number of British Woodworking Federation (BWF) members have entered administration or gone into liquidation during recent months – a clear sign, said a spokesman, of the tougher environment in which all joinery companies are being forced to operate. His message was: “Keep an eye on your cash flow and make sure you collect your money.”
Several of the joinery companies contacted this week said that they had implemented price increases earlier in the year but that these had been more than offset by higher costs. While energy and distribution costs are familiar sources of concern, a relatively recent phenomenon has been rapidly rising steel prices which have pushed up the costs of fasteners and fixings. Several companies confirmed that cost pressures would force them to look for price increases for the second half of 2008 – but none of them expected to push through even modest hikes with any ease.
No scope for price rises
“There is no scope for raising our prices,” insisted an architectural joinery expert. Indeed, he added, his company would probably be forced into a position of absorbing the significant wage increase scheduled for the summer rather than passing it on to customers through higher prices. Many architectural joiners are still reporting a decent level of enquiries – principally those involved at “the top end of the market” with legal/financial office fit-outs and high-end retail projects. A number of companies are busy with public sector jobs although these are said to be at least as price sensitive as ever.
But even for those companies that are busy at present, many of these projects were confirmed last year and the process of converting new enquiries into firm business “is certainly getting no easier”, said a spokesman for one of them. Another described the current workload as “manic” but acknowledged that the order book from August onwards was “a bit barren”.
In terms of trends, architectural joinery clients are still showing a marked preference for darker timbers – in particular, black walnut from North America. In addition, material with “fancy or unusual grains” is continuing to prove popular.
Having described recent diesel and electricity hikes as “the big cost factors”, a mass production joiner said raw material prices had “stabilised” by comparison although higher petrochemical prices had impacted on the internal door market because of the resin content of moulded door skins. “This is a comparatively low-cost product so distribution costs also take up a bigger proportion,” he said.
“Orders from housebuilders are now taking longer to come through and are being broken down into smaller elements. This reflects a trend towards building to order rather than building for stock” |
Door sales
Door sales have been generally lacklustre although orders for folding sliding patio doors are said to have held up comparatively well. Meanwhile, the flatness of the new housebuild sector has been hindering timber stairs sales. As a result of these factors, one mass producer said that it was revising downwards its budgets for the second half of 2008. This is despite a 20%-plus increase in timber window sales this year when compared to the early part of 2007 – an improvement attributed to the social housing sector, among others, opting increasingly for timber over PVCu on environmental grounds.
Window specialists also reported strong and growing interest in British Fenestration Rating Council window energy ratings. “These ratings are quickly becoming the norm,” it was noted, “because they are a quick way for manufacturers to reflect the work they have put in.”
Steel windows giant Crittall Windows’ recent launch of a range of timber and aluminium composite windows is seen as further testimony to the current “fashion” for wood windows. According to a senior spokesman for the BWF, the Crittall move “is not an isolated example”, with machinery companies reporting ever wider interest in creating or boosting timber window production capacity.
Positive publicity
This trend will have been further advanced by the positive coverage given to timber windows in BRE’s newly-updated Green Guide to Specification, which is intended to assist designers and specifiers in making the best environmental choices. “A lot of promotion of wood windows” would be undertaken around the Green Guide – including a Wood Window Alliance (WWA) publicity and advertising campaign, TTJ was told. Furthermore, the WWA is looking to collate in a single document all of the arguments for using timber windows in order to make this information more readily available. This resource will probably be web-based.
Installer scheme
Since many of the newer entrants to the timber window market boast a full-service offer, “perhaps traditional wood window companies ought to be thinking about installation”, one producer said. In this context, BM TRADA Certification launched a third-party certification Q-Mark scheme earlier this year to improve the quality and consistency of installation of windows and doorsets. “Correct installation is essential to maintain all aspects of product performance, such as ease of operation, weathertightness, security or thermal performance, all of which can be reduced or negated through poor installation, even if the products have been manufactured and tested to a high standard,” said product certification manager Simon Beer. The new scheme includes an initial audit at the company’s headquarters to verify the ordering process, and an on-site audit to ensure installation complies with relevant codes and procedures.
The installer scheme has generated “a lot of interest among housing associations and local authorities in particular, because they want to see things rubber-stamped”, noted a TRADA spokesperson.
A significant response has also greeted the news that Chiltern Dynamics has become the first test laboratory in the UK to achieve UKAS accreditation for the security testing of sliding doorsets to the principles of PAS 24. A number of manufacturers have already registered interest in the development given that “there is a lot of demand for sliding doors because they are fashionable and space saving”.
Also on the theme of doors, the BWF is producing a simulation-based video to highlight the value of installing proper fire doors. Scheduled to appear this summer, it will be used as part of The Federation’s own training programmes but will also be distributed to building control officials, architects and specifiers. The BWF has already met with representatives of the British Hospitality Association with a view to raising awareness of fire door-related issues within the hotel sector.