Reading the papers and watching the news you could be forgiven for thinking it is all doom and gloom out there.
Reports of the Irish government’s drastic cutbacks in public spending and constant bulletins of a possible war in Iraq have been a source of irritation for more than one contact in the trade. And then there was a seminar in Dublin the other week put on by property consultants called “Gloom or Bust”, prompting one timber merchant to comment: “You can talk yourself into an early grave”.
The economic reality is that the housing market, so important across the industry, remains strong. According to the Building Industry Bulletin, there were 56,800 new houses completed in 2002, with about 58,500 forecast for this year.
One merchant said: “The market has been exceptionally buoyant since Christmas. I would probably put that down to the mild and dry weather. We may have lost only three to four days since the holidays, that’s very, very good. Builders are working to full capacity and, from what I have heard, house sales are still buoyant and there are waiting lists.”
Another merchant concurred, saying the market looked good for the first half of the year. “There’s a fair level of building activity out there. But whether it’s sustainable or not I don’t know.”
Retail and residential sectors are growing but the office sector looks pretty dead with a glut of recently built unoccupied properties. As a result, some very attractive terms of lease are being offered.
On the board side, Coillte says SmartPly is said to be performing “extremely well”, with production being increased at the Waterford plant.
Another contact said the last quarter was very good, redressing a sales shortfall earlier last year. But orders aren’t coming easily and there is a lot of fighting to land business.
The contact said: “From talking to my customers this year, a lot are being realistic, with static maybe the best they can expect, rather than growth. There are a lot of imported boards which we have to try and push out of the market.”
Ice around the Baltic states, Russia and Finland has held ships carrying timber, while the supply of African hardwood has been interrupted by a ship running aground off Spain. According to one estimate this has delayed delivery by about six weeks.
Several sawmillers are evidently still not happy about log supply from Coillte. This issue has run and run and Coillte’s attempts to draw a line under it have thus far not succeeded.
One sawmiller acknowledged the market was good but supply of the 14cm-plus logs for construction was not sufficient. After heavy investment to boost capacity he is still working on a single shift.
“It’s a massive problem for the industry,” he said, adding that he wasn’t impressed with Coillte’s attempts to put smaller size logs and alternative species on the market.
There is good news for timber frame though. The Irish Timber Frame Manufacturers’ Association (ITFMA) estimates that it has a market share of about 18% now. This is up from just 1% in 1990, it says.
ITFMA appointment
Lorna Kelly has been appointed ITFMA’s full-time administrative manager and she will liaise with government departments in collating industry statistics and information, developing seminars and training workshops to help drive the industry forward.
Elk Fertighaus, one of Europe’s biggest timber frame home manufacturers is building a 100,000ft2 factory in Athy, Kildaire, which will create about 240 jobs, while the Griffner-Coillte partnership at Mullingar is also taking shape.
Spending on new contracting (public buildings, retail and industry) is forecast to reduce by 24% this year, with education down by 17% and government buildings reducing by 18%. However, government spending on national routes is forecast to increase by 26% and repairs by 1%.
And Iraq? Companies TTJ spoke to have no doubt a war would have a knock-on effect on the world economy, with people watching their money more closely, but they say they’re not spending all their time worrying about it.
One said: “If it is a short war and we quickly get back to square one, then we can get on with our lives. But if it is long and drawn out it could be bad for everyone, for the US economy and the European economy.”
Another said the most damaging economic fallout from war would be higher oil prices.
