Despite the wet start to spring and summer, this year’s fencing season was anything but a washout.
Dry, warm weather eluded the UK for many weeks in the early months but fencing demand was so strong that many mills failed to keep pace – not helped by starting the season with inventories lower than ideal.
“Demand through late spring and early summer was exceptional and mills struggled to overcome the shortfall suffered throughout the first half of the year,” said one sawmiller.
“The majority of domestic mills have been producing at maximum output but, without the additional buffer of strong inventory to support supply throughout the start of the season, mills were unable to get ahead and keep pace with demand. This resulted in supply chain challenges,” he said.
Despite these challenges, he added, the fencing sector had “performed extremely well”.
For one supplier, the fencing season had been so buoyant that his sales improved on last year.
A contractor was also pleased with this year’s demand, especially as he had picked up some “very sizeable jobs” while continuing to service customers’ smaller requirements.
He noted, however, that business slowed down during the school summer holidays.
“The pattern has now fully reverted to pre-Covid times when you expect peaks and troughs as a result of things like school holidays,” he said.
A supplier also found August quieter than expected, which he put down to it being the first “proper holiday season” for a long time.
One manufacturer and supplier was not as upbeat as others. He believed his business had suffered not only from the wet start to the season, but also from the “Covid void” – the aftermath of the insatiable demand for fencing from mid-2020 to late 2022.
He was not alone in saying the build-up to this year’s general election had created some uncertainty, even though the outcome was fairly certain.
“Business is always slower prior to a general election,” he said, adding that sales did rise again after the election.
In terms of product choices this year, the trend for contemporary, Venetian-style panels continued, along with the fencing staples of featheredge and waney-edge.
Fencing demand has now slowed with the arrival of autumn, and wetter weather. “Enquiries are still coming in but not the volume we had previously,” said a contractor.
He said business was now “ticking over nicely” on a seven-week lead time and he had stock to cover work that might arise from winter storms.
A sawmiller said September’s wet weather had accelerated the slowdown.
“Poor weather throughout September has dampened domestic fencing demand through the merchant network. Agricultural fencing has also been disrupted by poor weather and a late harvest, resulting in lower than normal activity levels,” he said.
The seasonal reduction in demand has been accompanied by price reductions.
“We are already seeing the usual end of season discounted offers, which are designed to keep volumes moving during the quieter winter months. Mills that have struggled to satisfy demand all year, and that will look to bolster their stocks through the winter in order to get ahead of the next season, will resist the temptation to discount stocks while struggling to keep pace with demand through the first quarter,” he said.
One supplier had his fingers crossed that discounting wouldn’t lead to prices crashing and “doing something stupid over the winter”.
“The industry needs stability,” he said.
During this slower period, merchants and contractors are ensuring they have sufficient stocks to meet a sudden increase in demand because of winter storms, while sawmills and producers are preparing to build stock in preparation for next year.
“As we experienced through Q4 2023 and throughout this season, unless we build stock during the back end of the year, we cannot keep pace with demand through the season. Product availability and the ability to be able to respond to an improving market is critical,” said one producer.
“We have the resource and capability to commit to a significant stock build at this time of year. This is essential in maintaining a balanced availability of product, ensuring our service and delivery times remain tight and we are able to support our customer base through what is the busiest and most important period in the fencing season.”
What happens in next year’s fencing season is, as always, dependent on the weather, and consumer confidence. This report was written before the chancellor, Rachel Reeves, delivered her autumn statement on October 30 but most contacts expected the government’s fiscal plans to set the mood music for the coming season.
“I expect the autumn statement to have an impact if people don’t have as much disposable income as they have had in the past,” said one contact.
A supplier agreed that the budget would influence people’s spending but he didn’t think the government’s plans would be as bad as many feared.
Another contact believed that the autumn statement had been so highly anticipated that, even if it contained some bitter pills, once it was delivered it would provide a clearer picture of the government’s intentions and bring some certainty and stability.
In the meantime, regardless of the trading conditions, a sawmiller implored the fencing sector to maintain standards and protect timber fencing’s performance and reputation.
“There are still too many instances of inferior, poor quality materials being mis-sold for short-term gain, which will ultimately deter end users from using timber,” he said.
“Treated correctly, timber offers long-term service and performance. Price will always be an important consideration but everyone involved in the sale of timber fencing has a responsibility to inform, educate and advise their customers as to the specification best suit to their project.”
UNCERTAINTY HANGS OVER PALLET SECTOR
Geopolitics and other global pressures mean uncertainty is a constant theme for the pallet sector. Timcon president John Dye explains
International pressures that have affected businesses globally for many months are persisting.
Price rises across the board, a global shipping crisis, and the complex impacts of Brexit and wars in Ukraine and the Middle East, haven’t been helped by new issues such as recent strike action affecting major ports along the east and Gulf coasts of the US and Montreal. Uncertainty is an ongoing feature of the market.
The price of energy and other essential inputs to the pallet and packaging sector have eased slightly. However, while the price of pallet timber had dipped towards the end of 2023, according to the independent Afry index, the last two quarters of trading show an increase of 4.4% (Q2) and 2.6% (Q3) in the price of home-grown and 6.5% and 4.6% respectively in Baltic pallet wood.
The price of packaging timber, meanwhile, has also started to climb again, with increases of 0.7% in the second quarter and 2.4% in the third quarter in the price of home-grown; and 1.6 % and 2.8% in the price of imported timber.
Demand from the market remains slack, and there are few signs of the seasonal Christmas uplift that has usually begun by this point in the year.
The market for second-hand pallets is reportedly busy. The latest wooden pallet and packaging marketing report, which is commissioned jointly by Timcon and Forest Research, shows a significant increase in the reuse of wooden pallets, growing by 10.6% during 2023 against the year before; and almost 40% since 2015 – across all pallet-using sectors, from fast-moving consumer goods to construction.
This demonstrates the increasing focus of businesses towards maximising the lifespan of pallets through reuse and once again highlights the central position wooden pallets have in the development of circular supply chains, thanks to their inherent repairability, reusability, and recyclability.
Timcon is continuing its dialogue with Defra, which has committed to introducing a reuse incentive scheme for wooden pallets and packaging to boost further the sustainability of the huge number of supply chains that are using these products.
The market report, which is written by John Clegg Consulting, showed an estimated total of 41.7 million pallets manufactured during 2023, a fall of 7.9% on the 45.3 million made during 2023. Overall, the manufacture of new pallets has decreased by approximately 18% over the past three years as users have repaired and reused pallets in larger volumes.
