he long overdue arrival of milder weather last weekend has brought a sigh of relief across the fencing product supply chain.
The effect has been immediate, with fencing sawmillers and traders noticing a pickup in business.
The Met Office’s latest weather forecasts suggest normal spring weather to the middle of May, which, if correct, should give plenty of scope to make up for some lost time during the long, harsh winter.
But the poor Easter – normally the biggest fencing and garden product sales period of the year – will undoubtedly have hurt most operators and cash could be tight.
One contact told TTJ that the combination of poor summer trading last year, due to high rainfall, the long winter and now a poor Easter, meant question marks are being raised about cash flow in the supply chain.
"Nobody is sitting on a cash mountain," he said. "I expect there will be blood on the carpet."
The combination of cash tills not ringing and fencing stocks not moving has created some pressure and some traders and manufacturers could be in an awkward position should the Met Office forecasts be wrong.
"The year to date has been awful," said one large fencing manufacturer. "Easter should have been a good week, instead it was freezing.
"Up until now we have been behind budget every month because of the winter. But things are starting to improve because the weather has improved. Last weekend was only the second weekend of the year I ventured out into the garden.
"I think things are going to pick up now and let’s hope they will pick up big time. But you never catch up lost sales."
Wickes and Travis Perkins have attempted to get the market moving by offering discounts, the former cutting fence panel prices by 15%. There is the prospect of more bulk deals and cut-price offers across the market if good weather stays elusive.
Another consequence of gardens blooming later is the possibility of the industry going from famine to feast. "We could suddenly have one or two fantastic weeks," said a contact. A question being asked is, can the supply chain provide product quickly enough in such a scenario, especially when it has been starved of cash?
Another manufacturer admitted a "tight" start to the year but said weather wasn’t the sole factor.
He pointed out there was significant growth in Q1 last year so his company tempered its budget forecast for Q1 2013, knowing the comparison would not be like-for-like. He expected a 25% drop in sales, but the figures show a more severe decline – 50-55% down on a year ago. Severe weather and higher customer stock levels going into 2013 were the official reasons.
While fencing has been slow, garden buildings and shed operations have been decent, so he has switched some production to these products.
Local authority funding Another contact acknowledged the difficult market, but had noticed the release of significant local authority funding for fencing work."There’s definitely been a lift in the last few weeks," he said. A further problem caused by the cold has been the availability of logs above 4.2m.
"We’ve only just got some 5.2m logs in, which we’ve been waiting for since Christmas. Customers are demanding more products in longer lengths," said a contact, adding that he’d noticed a lift in spruce log prices in the last couple of months.
A contact in the forestry/harvesting sector reported that sawmillers were still taking material in but their yards were pretty full of roundwood. And he highlighted the price gap between the price of home-grown wood and imported timber.
Some merchants who have been reluctant to change from traditional imported sawn timber sources may find the price rises currently being asked by Scandinavian sawmillers too much, with a resultant switch to cheaper home-grown timber.
One source thought there was potential for an extra 150,000m3 of import substitution. "There is quite a lot of headroom for UK prices to move up," he said. "If it does move up there will be quite a scrabble for roundwood."
Another contact described raw material prices as "relatively stable" and said he had managed to secure price increases for his fence panels at the start of 2013 after a long period of negotiations.
On the continuing debate about fence post durability, incising has made clear headway, with several mills having an incised post offering to increase timber treatment penetration and guarantee post performance.
Some of the national merchants are taking a look at these products, while others are maintaining a watching brief.
One manufacturer said his customer base was confident enough in his current product offer and he was unsure whether the market would pay the price premium for incised posts. Meanwhile, contacts report that internet sales of garden fencing continue to grow.
One contact predicted national retailers would offer more flexibility and service with their internet offering, including fence installation services, usually the domain of the local independent fencing specialist.
"All the traditional lines of selling products are increasingly being blurred," he said.
