The Woodworking industry is hopeful that investment in growing the market can balance out Brexit uncertainty and cost rises.
So says the BWF, which reported that despite the pessism around construction of late, more than two-thirds of BWF members indicated they were set to invest more in product improvement.
Says BWF’s Policy and Communications Executive Matt Mahony,“Slightly fewer order books extending beyond three months and consecutive quarters of lowered sales growth expectations conceal the reality which is that our members have been selling products and adapting to the higher costs that have now unfortunately become the new norm.
More than two-thirds of respondents noted that Brexit-related uncertainty has already affected their business, with two-thirds of those identifying the impact as being increased raw material costs. If we look to the longer term however, manufacturers are unsure as to what the effects of Brexit might be.
On the plus side, it’s hugely encouraging to see joinery manufacturers taking a proactive approach to growing their market. Investment in e-business is set to increase by half and customer research is anticipated to double.
“With the innovation and initiative of our members reflected in the survey results, there are plenty of reasons why wood should be the material of the choice for 2018 and beyond.
The irreparable damage of plastic pollution is never far from the news, with programmes such as Blue Planet 2 capturing the public imagination and the Wood Window Alliance’s Fake Facts campaign shining a spotlight on the PVC-u industry’s ‘plastic promises’.
We will be building on existing resources to support members of all sizes in showcasing their products as beautiful and sustainable and illustrating the benefits to specifiers of building it with wood.”
Key points from the BWF Joinery State of Trade Survey Q4 2017 include:
A balance of 33% of respondents reported an increase in sales volumes over the last quarter, with 41% reporting an increase over the last year. This corresponds with the 44% of respondents reporting a quarterly increase in the previous survey.
Some 68% of respondents felt that Brexit-related uncertainty had affected their business so far with 67% of those noting that the cost of raw materials was where it had impacted.
A balance of 32% felt that Brexit negotiations would have a negative impact on their business in the next 12 months.
When asked about the impact of Brexit over 5 years, respondents were split between whether it would be positive or negative (25% for each) with 40% unsure of the implications and 10% expecting no impact.
Manufacturers felt that sales volumes would improve in the next quarter, with a balance of 34% predicting an increase for Q1 2018, and a balance of 30% predicting an increase over the next year.
Around 19% of companies reported a current order book of future work extending beyond 3 months – down 7% from the previous quarter – with 53% saying that their order book extended to between 1 and 3 months.
Demand was listed as the most likely constraint on output over the next year by 37% of respondents. Labour availability and Capacity came next, with 24% and 20% of respondents feeling that they were most likely to constrain output.
Some 32% of respondents on balance reported increasing their labour force in the previous year, with 44% of respondents anticipating an increased labour force over the next year.
Raw material costs were noted as a major inflationary factor for unit costs for 95% of respondents on balance, with wages/salaries increases pushing up unit costs for 67% of respondents on balance.
Over the previous year a balance of 59% of respondents had invested in improving their products with 45% investing in their manufacturing equipment.
Investment in product improvement was set for the highest capital investment over the next year, with a balance of 67% planning to invest and with 48% set to invest in equipment.