Some 43% of the UK timber products industry will be unable to afford the 3.1% average wage increase estimated for next year according to industry analyst Plimsoll Publishing Ltd.
It says research shows that with profit margins at a record low and with 25% of the industry already loss making, salary increases would be foolhardy.
The analysis has also placed 40% of the top 1,000 UK timber products companies in “financial danger” and, as they are suffering from severe financial constraints, any extra costs are simply unsustainable.
Analyst David Pattison said: “The productivity race has started. You only have to look at the US where any increased sales have not lead to extra jobs. Companies have just got more productive by getting more sales and profit out of their existing employees simply to remain competitive.
“In the UK companies must be aiming for at least £136,000 per person to even get in that race.”