Timcon said there was “significant evidence” of price increases and shortages for the sector, particularly due to strong growth in housebuilding over the last few months.
“Competition and weak demand in recent years have kept prices of timber pallets and packaging at a low, even unsustainable level, for a significant period of time,” said Stuart Hex, Timcon general secretary.
“We are now facing increasing timber prices, which as an industry we cannot absorb.”
Mr Hex said the latest Markit/CIPS UK manufacturing report showed increased prices for timber, pallet timber and pallets, while the latest Pöyry index for pallet and packaging timber shows compound growth in home-grown pallet timber during Q2 and Q3 of almost 10%, with a sharp acceleration in Q3.
“The prices of non-standard pallet timber sizes are increasing at a much higher rate than identified by the Pöyry Index, which is restricted to standard sizes; and there is a reluctance by the sawmills to cut non-standard sizes for pallets when there is strong demand for higher-value construction timber.”
Mr Hex said current indications were that the construction industry recovery would continue, which had major ongoing implications for the timber pallet and packaging sector.
