The gap between profitable and struggling timber merchants is widening, according to the latest report by industry analyst Plimsoll Publishing.

They survey of the financial performance of 750 timber merchants found that 315 companies have seen their profits fall, with one in five currently losing money, while 435 firms reported an increase in profitability, some with margins of 4%. This compares with most companies reporting profits of less than 2%.

Senior analyst David Pattison said the results showed that during the recession some companies had sharpened their management and improved directors’ accountability, leading to an increase in profitability.

Overall the market was showing no growth, compared with almost 7% growth this time last year. Although 401 firms had seen sales increase, some by as much as 15%.

“The recession seems to have accelerated a shift in the market. Some companies have been affected by those that have swapped to low-cost alternativs or by the loss of a key client. Others are clearly benefiting from this move,” said Mr Pattison.