The latest figures from the Builders Merchants Building Index (BMBI), published in August, show Q2 2022 recorded the highest revenue since the BMBI started, despite lacklustre June sales. However, with Q2 volumes falling -11.3% compared with Q2 2021, +17.3% price inflation is behind the record-breaking growth.
Total value sales to builders and contractors in Q2 2022 were +4% higher than Q2 2021, with one fewer trading day this year. Ten of the 12 categories sold more with kitchens and bathrooms (+18.5%), heavy building materials (+9.2%), decorating (+7.0%), tools (+2.9%) and ironmongery (+1.3%) all having their best-ever quarterly sales. Only timber and joinery products (-3%) and landscaping (-6.3%) sold less.
Comparing Q2 2022 with Q2 2019, a pre-pandemic year, total value sales were +25.2% higher this year, but volume sales were -2.7% down while prices were up +28.7%. Despite one fewer trading day, like-for-like sales were +27.3% higher. All categories sold more including timber and joinery products (+37%).
Quarter-on-quarter, sales were up +9.7% in Q2 2022 compared to Q1 2022. Volume sales were +7.9% higher and prices were up +1.6%. Like-for-like sales were +15.1% higher in Q2, despite three fewer trading days in the most recent quarter. Timber and joinery products (+3.3%) grew more slowly.
“The timber industry has seen a slowdown in demand over recent weeks,” said Simon Woods, European sales, marketing and logistics director, West Fraser and BMBI’s expert for wood-based panels.
“Demand has softened due to many factors including plunging consumer confidence, higher energy costs, increasing interest rates, rising fuel costs, rising consumer price inflation etc.
“The world has been changing on the supply side too. In response to the Ukraine war, imports of any wood-based material are no longer possible from Russia and Belarus. They’re not possible from Ukraine either, for different, hopefully temporary reasons.
“This removes a significant volume of wood from the market. In some assessments that’s estimated to be more than 55 million m3 (roundwood equivalents) a year. This will have a significant effect on countries previously importing from Russia and Belarus, and they are now seeking replacements from within Europe. The knock-on from that means that the cost of wood is increasing, and this will, in turn, affect all those products derived from roundwood: sawn timber, OSB, particleboard (PB), which includes chipboard and low-density fibreboard, MDF, pulp etc.
“About 8% of total OSB (over 500,000m3) has been removed from the European market, due to the ban on Russian and Belarussian imports. Over 1.2 million m3 of hardwood, plywood, and almost 800,000m3 of PB have also been removed from the market.
“As demand recovers, availability will be interesting, but hopefully European producers can step forward and fill the voids.”
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