As 2010 gets under way, and official estimates due later this month may show that Britain emerged from recession in the final quarter of last year, timber businesses and their customers can begin to raise their sights to longer-term strategies for growth rather than mere survival.
The housing market received an early boost as Bank of England figures revealed a 5% increase in mortgage approvals between October and November, to the highest level since March 2008.
But the Financial Times reports that house price predictions for this year made by banks, economists and estate agencies range from continued growth, to a heavy fall. The RICS says housing prices are likely to rise by up to 2%, helped by a lack of supply.
In December the decline in demand for construction materials accelerated, as overall activity in the industry contracted for the 22nd month – led by a sharp downturn in commercial building projects. Commenting on the situation, David Noble, CEO of CIPS, said one glimmer of hope in an otherwise disappointing end to the year is “a marked improvement in activity” in the home-building sector, which has recorded growth for four months running.
NHBC registrations
NHBC registrations of new housing starts in November were up 71% annually. But concern for other sectors of the construction industry is tempered by the official count of new orders, which fell 2% in the year to October.
Fresh data on UK imports of builders’ carpentry and joinery show that demand fell by 16% annually in the third quarter of 2009. Total imports of wood and wood products, other than furniture, declined 12% annually. Export sales of builders’ carpentry held steady at the yearly rate, but export sales of other wood and wood products slipped 14% overall.
Overseas demand for UK-made furniture fell by 18% in the year to the third quarter, with kitchen furniture exports down 30%, chairs and seats down 22%, and other domestic furniture sales 13% lower.
UK furniture imports dropped nearly 14% annually in the third quarter. Kitchen and office and shop furniture bore the brunt, while imports of chairs and seats and of other domestic furniture were the least affected.
Furniture purchases
Official estimates of UK household outlays on furniture in the third quarter of last year show a drop of 5.6% compared with a year earlier, in seasonally adjusted volume terms, and a 1.3% fall by value. The latest retail sales evidence indicates a strong 8.4% growth in volumes over the year to November, although low levels of demand during November 2008 flatter the figure.
Furniture outlets were among retailers who benefited from “solid growth” in the run-up to Christmas, said the CBI. In contrast, DIY stores reported that sales were broadly unchanged after several months of year-on-year falls. Both are likely to have suffered from the winter weather.
Despite a drop in consumer confidence for two months in a row, pollster GfK NOP shows the climate for making major purchases improved during December. However, future household spending will be constrained by subdued income growth, higher taxes and increasing jobless numbers, suggesting that the recent upturn in furniture sales will be short-lived.
