Just a few days ago the BWF published its latest quarterly State of Trade survey. What is clear is that continuing uncertainty and tough trading conditions in the joinery manufacturing sector is limiting ability and confidence to invest in future growth, not just constraining us now, but potentially limiting our future.

With construction output contracting by 2.5% in the third quarter, BWF members are still painting a picture of prudent expenditure and low market confidence. The BWF’s results tally with those of other industry associations. The National Specialist Contractors Council (NSCC) survey indicated that specialist contractors were similarly constricted, although, as with the BWF survey, the medium term outlook into 2013 appears to be more positive, with over a third of specialist contractors expecting an increase in workload and around a quarter looking to expand their businesses over the next 12 months. The Construction Products Association’s survey also closely follows the mood of the BWF membership.

That is not to say that there is no growth anywhere. There is evidence that timber windows are gaining market share against rival materials and attrition in the market undoubtedly creates growth opportunities for others. But the overall picture remains constrained. The frustration is that, realistically, the construction section generally and housing market particularly, has to grow. It is not a case of if, but when. Private housing is the most important sector for 60% of the BWF membership and is, for us, consequently the key catalyst for growth and, according to John Cridland at the CBI, the economy as a whole.

We know that the construction sector is capable of delivering housing and infrastructure needs in an environmentally sustainable and affordable way. We know that the timber and joinery sectors can play a crucial role in this, improving the thermal performance of the UK’s existing properties and providing genuine career opportunities in areas of high unemployment. This is of little solace to those joinery businesses delaying investment decisions and considering the merits of restructuring their workforce.

It is widely quoted that £1 invested in construction generates almost three times that in total economic activity. With such a high proportion of building materials made in the UK, the sector should be a crucial component of UK growth rather than a drag on it.

This has been a clear message in our lobbying all year, and in our most recent letter to the chancellor. Our voice joins a chorus of others calling for a relaxation in capital expenditure and investment in growth. We must see measures to re-energise an industry which has suffered from stagnation in the construction and housing markets and is still affected by lack of market confidence, late payment, restricted cash flow and high fuel and energy costs.

BWF proposals

As I see it, the industry is justified in its demands across a number of areas. Our top eight proposals include:

  • A focus on growth – led from the top of government through a National Growth Council supported by key industry champions, in order to speed up decision making and support a vision for growth.
  • A stronger Housing Strategy – bolstered by financial institutions lending where viable, freeing up land and supporting the aims of Homes for Britain to turn the current housing crisis into a catalyst for growth.
  • Better access to finance – increased pressure on banks to work with businesses in a flexible and ‘can do’ way, and ensuring that rates remain competitive and terms realistic.
  • Rewarding investment – through an increase in the Annual Investment Allowance to support forward-looking companies.
  • Increased pressure on late-paying contractors – by going further than naming and shaming persistent offenders and penalising such companies in the tender process. Government should continue liaising with the NSCC on its Fair Payment Campaign.
  • A focus on the cost of doing business – including no rise in fuel duty. Fuel prices continue to put a strain on joinery businesses that are often forced to look further afield for clients at a time when margins are being aggressively squeezed. A reduction in the rate of employers’ National Insurance for one or two years in order to incentivise smaller businesses to bring young people into the workforce would also be useful support.
  • Support for a ‘Wood First’ rule – as endorsed in July’s Defra-commissioned report by the Independent Panel on Forestry, to assist the UK in harnessing some of the wider economic, aesthetic, biodiversity and community benefits of using wood and wood products.
  • Measures to ensure the Green Deal picks up momentum, and is structured to deliver real benefits through the supply chain to SME installers and product manufacturers. Further opportunities such as stamp duty rebates for those making energy-efficiency improvements to their homes, and reducing VAT to 5% for Green Deal measures and equivalent energy efficiency work. Such a reduction could also be applied to all private housing repairs and improvement work.

Admittedly there has been some positive news this year, such as the freeze in the development rate of the minimum wage (as suggested in the BWF’s pre-budget letter earlier this year), as well as attempts to reduce bureaucracy in the planning system and measures aimed to resolve employment disputes more cost-effectively.

But business and construction must take centre stage. Now is the time for the chancellor to outline a clear strategy for growth that unites the various parts of government, supports a pro-business agenda and recognises the vital role of manufacturers.