Aided by relatively healthy business levels in the first few months of the year, UK joinery companies seem to have succeeded in pushing through price increases. However, a significant proportion of this additional revenue has been used to offset substantial increases in raw material and other costs.
Reflecting the views of many other firms in the sector, a leading mass production joiner reported good demand for timber windows and doors but somewhat “flat” order levels for stairs. Window sales were “up slightly” from last year, thanks partly to the fact that orders from the public sector were “flying”. He said an increasing number of public sector customers were looking to satisfy sustainability requirements. “The capital cost is higher but many customers are looking to the long term,” he said. “The danger is that the PVCu industry is fighting back with its own arguments on sustainability. We need to make sure that we don’t let the advantage slip.”
Rising materials costs
Manufacturers of timber windows and doors have been coming under increasing pressure from the rising costs of timber, glass and even metal components. However, a recent fire doors survey from the British Woodworking Federation (BWF), indicated that positive market conditions have given manufacturers the confidence to raise prices.
A leading mass producer said that spiralling bills had forced his company to throw off earlier reluctance to raise prices despite intense competition from domestic and overseas suppliers. Since the start of the year, his company had introduced “single digit” percentage price increases. Another mass manufacturer confirmed price increases “approaching double figures” since the start of 2007 on timber windows and doorsets. He did not rule out further hikes towards the middle of the year given escalating raw material, transport and energy costs. He said that orders were “definitely” above early-2006 levels: “We have had a cracking last couple of months – the only limitation is our ability to manufacture more.”
The timber stairs market had a relatively slow start to 2007, and faced high levels of competition. There has been a continuation of the trend towards pre-assembly although part-finishing on site is still favoured in many instances “because some sites are still not handling factory-finished products properly”.
Few joiners report significant difficulties in sourcing timber, although a supply expert said that specialist products at the high-quality end of the market were proving more difficult to secure. As a result, some consumers were rethinking purchases.
Weather hampers supply
With relatively mild winter weather hampering timber flows to the market, there has been evidence of joinery customers “over-ordering because they are worried about supply and because they want to avoid having to pay even higher prices at some point in the future”. Taking second quarter increases into account, whitewood prices have risen by upwards of 15% since the start of 2007 while redwood values have gained nearer 11-12%.
Most of the architectural joinery firms contacted this week appear to have enjoyed a reasonably busy first quarter, with many claiming that sufficient work is on the books to carry them well into the second half of the year. A few companies confirmed that they were working on extended lead times. Relatively healthy fit-out and refurbishment orders were reported from the office, hotel and retail sectors, while high-end residential work has maintained its healthy momentum. “I think it’s going to be a pretty decent year,” said one.
In common with mass production joinery businesses, firms in the architectural sector have found themselves in a position to increase their prices – albeit only slightly in many instances, owing to the still-competitive nature of the business. According to a senior spokesperson for a company which has recently pushed through a 2-3% increase, prices had been “suppressed for long enough” given that costs had continue to rise. He pointed in particular to the escalating cost of panel products and of some hardwoods, as well as to climbing energy and transport bills. Allowances also had to be made for significantly higher wage costs that companies would have to bear from the summer onwards.
Labour problems
On the subject of labour, the majority of architectural joiners appear to be struggling to convince promising employees “to come off the factory floor and take up supervisor, foreman or other management roles”. In addition, bench joiner vacancies are proving very difficult to fill for many companies – not least because a large proportion of younger employees prefer site work.
Turning to species trends, particularly strong demand was reported for American black walnut, with most contacts saying that darker species are generally proving a greater attraction than lighter species such as hard maple. According to a veneer specialist, oak remains a dominant force in the market while walnut is continuing to enjoy a surge in popularity. He also said that increasing number of customers are prepared to experiment with more unusual options such as zebrano.
In other joinery sector news, we reported earlier that a PVCu window manufacturer had been lobbying the government to have VAT reduced to 5% on all products that are energy rated under the British Fenestration Rating Council (BFRC) scheme. The campaign appears to have struck a chord with the government given that Clause 7.71 of Gordon Brown’s latest Budget reads: “The government supports the development of energy-efficient glazing technology, and welcomes the introduction of the British Fenestration Rating Council’s Window Energy Rating System. The Government will carefully monitor the progress of this rating system and developments in the market, and will work with the industry and manufacturers to explore the case and scope for incentives to encourage the installation of energy-efficient glazing.”
Energy rating shortfall
TTJ was told this week: “There are still not enough timber window manufacturers coming forward to join the BFRC scheme. Hopefully, this recognition will serve as an incentive for more to come forward.”
The Budget reference to possible energy efficiency incentives followed news that the government had made a submission to European finance ministers to allow for a reduced VAT rate of 5% on energy saving and environmentally-friendly products in the home. Timber window manufacturers have been urged to lobby their MPs to ensure that their products receive this favourable treatment, which could provide a significant sales boost.
Meanwhile, TRADA’s sister company Chiltern Dynamics has reported more demand for door testing under PAS 24 – the security standard referenced by Secured by Design. This increase is attributed to the fact that, during April, Secured by Design is scheduled to update its parameters to recognise that double doors can now be certified to PAS 24.
The British Woodworking Federation (BWF) has also reported increasing demand among major buyers for environmental chain of custody certification covering the manufacturing process. A spokesperson told TTJ: “Joiners, among others, will have to recognise this push. I expect local authorities and the social housing sector to follow suit [asking for full chain of custody certification], and then perhaps even the private housebuilding sector too.”
The BWF said that, with other leading trade associations, it is in the initial stages bridging “gaps in life cycle assessment data relating to timber”. “We are strong on the carbon and renewability side – but that’s not the whole issue,” it said. “We in the joinery sector and the timber industry as a whole need to grasp this quite quickly.”
