• After a busy start to the season, fencing orders are now lower than normal.
  • At the peak of demand, some countries, such as Germany, were filling the gap for fencing.
  • The recent flooding has reduced demand for fencing.
  • Pallet manufacturers have been struggling for raw material supply.
  • Some pallet suppliers have managed significant price rises.

?The fencing season started early in 2007 and maintained a frantically hot pace until the early summer whereas some companies are now reporting that order levels have dropped below normal levels for the mid-summer period.

Mills producing fencing materials can look back on perhaps their “best year on record”; the recent slowdown in sales was providing what many producers regarded as “a welcome opportunity to pause for breath and catch up on holiday and maintenance”.

This year has been marked by “very strong” demand from the agricultural sector while roundwood fencing for landscaping projects has also been selling well. And as a measure of the strength of the domestic fencing market, a leading supplier to the DIY sheds confirmed that sales over the peak period between February and late June this year were a massive 180% ahead of budget. Higher turnover figures for fencing sellers are also said to reflect the public’s willingness to pay more to obtain a higher-specification product.

The trend towards higher quality also applies to sheds and other garden buildings.

The spokesperson for the same sheds supplier added that his company had pushed through price increases totalling around 20% over the February-June period. While major retailers were still putting pressure on their suppliers to keep prices as low as possible, at least it was now possible to table the notion of a price increase, he added.

It was underlined this week that a large proportion of suppliers’ sales price gains had disappeared into offsetting significantly higher raw material costs. Fencing timber prices stabilised to some extent during July but remain at high levels in historical terms.

“In the recent past, if you hadn’t got a contract, you didn’t get the material,” TTJ was told. “Now you can get the material, but not if you try to undercut the quoted price.”

During the months of peak demand, the shortfall in UK availability attracted supplies of fencing materials from abroad – notably Germany, which was affected by significant wind-blow earlier this year.

Reportedly, some German suppliers of boards and posts have been achieving astonishing turnround times of five to seven days from point of order to delivery to UK customers. “This indicates that they have the stock available and that UK price levels are now of interest,” suggested one source. However, he went on to say, “the yawning gap between supply and demand in the UK market is starting to close up rapidly and the outlook is much steadier”.

Unstoppable momentum

According to a number of mills supplying fencing timber, prices on some products took on an almost unstoppable momentum during the boom period earlier this year. One estimated that prices of feather edge boards had leapt 60% between March and June, although a spokesman pointed out that operators locked into longer-term supply deals were not able to take full advantage of these increases. And he added that the company had “tried to manage these increases responsibly” in the interests of a sustainable market.

That said, there is still strong demand for fencing slats, battens and cappings – to the extent that “buyers are taking whatever’s available before asking about the price”, according to one source. At the same time, competition among the mills for roundwood remains intense and deliveries are still subject to “long waiting times”.

Fencing companies were certainly “hurt” by the scale – and frequency – of timber price increases during the first half of the year, particularly those which had booked fixed-price contracts with their own customers, it was noted. This was identified as one of the key factors behind a slight acceleration in the UK fencing business failure rate.

In more recent weeks, however, timber prices have stabilised to some extent and supply of panels/general fencing timbers has improved, thereby enabling operators to build stocks to what most described this week as “reasonable levels”. Whereas fencing companies had seen their lead times extend to well over a month earlier in the year, some are now offering deliveries “within a day or two”, TTJ was told: “If we have good weather in September and October, the fencing season could easily carry on, so the sensible companies are seeing the need to be better stocked.”

Of course, the recent dampening of fencing demand has coincided with the floods affecting some parts of England and Wales. A number of DIY stores are understood to have been forced into temporary closure or restricted operation by the flood waters, but most seem to have returned to normal within a few days. For fencing suppliers, the floods have affected deliveries in some instances.

Clearly, the unseasonably wet conditions will have prevented many people from working in their gardens. Fencing demand tends to soften in any case during the summer; nevertheless, some experts are wondering whether the bad weather will create pent-up demand for later in the year.