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Report from
Europe
Government urged to back low carbon homes
The UK timber industry trade body, Timber Development
UK (TDUK), has urged the country’s government to give
more support to low carbon home building. TDUK Chief
Executive issued the plea after the new Labour
government’s Chancellor of the Exchequer, Rachel
Reeves, unveiled her budget in October, laying out tax and
spending plans for the year ahead.
The government announced further investment in
affordable housing and building energy efficiency and
reforms to planning as part of the strategy to boost UK
house building to 370,000 properties a year.
On the latter target, Hopkins said the ‘devil will be in the
delivery’ and that the government would be wise tie in
more house building with mechanisms and funding to
support low carbon construction given that building and
buildings in use account for 25% of UK greenhouse gas
emissions. He suggested there should be backing, in
particular, for low energy offsite construction, where
houses are prefabricated in factories. It’s an approach
which favours timber as the core material.
Hopkins added. “If we are to generate systemic change,
we need to encourage and recognise investment into
offsite manufacturing, skills for the future and low-carbon
construction solutions. The timber industry has been a
critical driver for the UK across all three of these areas as
a proven business solution which offers quicker build
times, higher quality homes, and carbon capture and
storage”.
He added, there needs to be a move away from energy-
intensive, non-regenerative resource and greater priority
given to using low-carbon materials. Such a strategy is
laid out in the Timber in Construction Manifesto 2024
produced by the UK timber industry umbrella body, the
Confederation of Timber Industries.
See: https://timberdevelopment.uk/wp-
content/uploads/2023/07/Timber-in-Construction-Manifesto-
2024.pdf
and
https://timberdevelopment.uk/
UK hardwood trade hoping for better times in 2025
‘Average’ is how one trader summed up the current UK
hardwood market, echoing the sentiment of others in the
business. “Through the year it’s just been pretty flat,” said
an importer. “We set our budget and we’ve hit our
numbers each month but we’re only just getting over the
line. We’ve had busy weeks, then quiet ones. There’s
been no pattern to it.”
The state of the market was mainly attributed to the slow-
moving UK economy. The latest British Chambers of
Commerce outlook forecasts a slight improvement from its
previous analysis, but predicts 2024 GDP growth of just
1.1%, with government spending the main driver. It
expects household consumption to increase in 2025 as the
effect feeds through of lower inflation and interest rates
(cut by the Bank of England on November 7 to 4.75%),
but it sees GDP growth only hovering around 1%, before
rising to 1.1% in 2026.
One hardwood importer said after a slow summer they had
seen ‘some improvement in volumes in September. “But
margins remain under pressure,” Another importer agreed
June to August was particularly quiet, more so than the
usual summer vacation lull. But they too reported some
improvement in September into October.
“We’ve had an increase in merchant activity and seem to
be heading back to where we want to be,” they said.
“Whether the budget reinforces the improvement or slams
the brakes back on remains to be seen.”
“We won’t see the outcomes until the medium to longer
term and budget commentary in the media and financial
sector is very varied,” said an importer.
“The hospitality sector is saying the increase in their
employee National Insurance payments will hit their
ability to not only recruit people, but to invest in
refurbishment.
However, the government is devoting an extra £1.4 billion
to school rebuilds and the hike in the minimum wage, fuel
duty freeze and pension triple look, in combination with
lower interest and inflation rates,to underpin higher
consumer spending.”
Government promises of measures to increase house
building to over 300,0000 homes were expected by an
importer to boost the market as early as next year,
reinforcing the positive effect of lower interest rates.
“We expect the government’s pledge to help improve
industry and consumer confidence, lifting house building
and repair maintenance and improvement work after some
pretty depressed times,” they said. “Although it will take
longer to feed through to second fix work in house
interiors where most hardwood is used.”
This view tallies with forecasts from the Construction
Products Association (CPA) in its Autumn report
(www.constructionproducts.org.uk). After an ‘extremely
challenging 18 months’ for the sector, it predicts UK
construction output, to be 2.9% lower this year, before
growing 2.5% next year and 3.8% in 2026.
Private house building is predicted to be down 9% this
year, but then to grow 8% and 7% in 2025 and 2026
respectively. Repair, maintenance and improvement work
(RMI) is forecast to be 4% lower this year, but to pick up
from Q2 2025 due to ‘the wider house construction
recovery, increased consumer confidence and sustained
real wage growth’, says the CPA. It predicts overall
growth in RMI of 3% next year and 4% in 2026.
The brighter spots in the hardwood market more recently,
said suppliers canvassed, include some areas of joinery.
“Demand from staircase and window makers has picked
up recently,” said an importer. “Hopefully that’s a sign of
recovery in home improvement which contracted sharply
after the boom times of the pandemic.”
Another importer distributor reported more activity in the
door sector. “It seems to be driven by commercial and
hospital builds,” they said. “From framing to door blanks,
we’ve been getting busier.”
Another point of general agreement in the sector is that
there is plenty of hardwood in the market. “Against the
background of generally flat trade for 18 months, there’s a
lot of wood on the ground,” said an importer. “And we
expect that to be accentuated by the closure of a
Manchester importer. Overall, high stock levels are
keeping margins tight.”
Looking at sources of supply, industrial relations at US
ports are causing concern. “The dockers strike in
September may have been called off, but it’s a temporary
agreement and it’s back to the negotiating table in January
so the American hardwood supply chain remains fragile,”
said one importer.
“The implications of another strike are obviously serious,”
said an importer distributor. “Besides the impacts on
immediate deliveries, there are knock-ons in terms of
container distribution. There is now an element of
suppliers using the dispute to drive the market.
Against the backdrop of continuing robust US domestic
hardwood demand importers say it’s also a seller’s market.
“Getting what you want in terms of grade, dimension and
so on is challenging,” said an importer. “You have to be
proactive and hunt it down and you’ll still probably have
to buy half a container of what you don’t want to get the
half you do.”
On European hardwood, oak and beech supply are
reported to be stable, prices likewise. “Availability is
there,” said an importer-distributor. “On oak, if I need to
buy ten loads, I know I can and the stronger pound has
helped us on price.”
As far as African hardwoods are is concerned, an EU-
based supplier to the UK reports shorter delivery times,
except on iroko, doussie and zebrano.
Sapele prices were reported down marginally at the start of
the year but have been stable since. An importer said there
is also enough African hardwood in the system. However,
one importer said they had struggled to sell sapele over the
last year due to an increase in uncertified timber coming
into the market at prices they couldn’t compete with.
“But we’re taking a strong stance. We decided 18 months
ago to buy the majority of our sapele from one FSC-
certified shipper supplying a quality product. We won’t
sell anything less than verified legal and preferably FSC-
certified.”
But another importer reported a contrasting experience,
saying the ‘benefits in the market of offering FSC-certified
African hardwood are more tangible than before’. “Maybe
it’s because it has become better known, with more major
African shippers now offering it,” they said, adding that
their premium on FSC sapele was 10%.
UK importers report iroko being increasingly difficult to
find in sufficient quantities. Prices were also pushed up by
lack of drying capacity, said an importer, although have
now plateaued.
Lesser-known African species, despite the environmental
arguments for using them, are still reported to be making
only limited headway. “It’s partly because UK hardwood
users are inherently conservative, but also the need for
more technical information” said an importer distributor.
“Density is a particular issue. Some lesser-known species
are extremely variable and wood machinists do not want to
take a risk. We do see better prospects for them used to
make engineered components for doors and windows,
where we can sell product on end-use rather than species.
But progress is not going to come rapidly.”
Certified South American red grandis is reported to be a
good solid business. But trade with Asia, notably in
Meranti, is said to have been slow.
Perspectives on the engineered hardwood market vary.
One importer said business was buoyant in engineered E.
grandis and sapele and that they had started buying from
one of West Africa’s largest producers. Another said their
engineered sales, mainly in oak, red grandis and pine had
dipped in the weak wider market. “But we’re still
marketing it strongly and believe demand will return in
2025”.
There’s positivity about prospects for modified wood.
While the expansion work at Accsys’ Accoya plant in
Arnhem caused a hiatus in supply, now that is complete,
and production has started at the new US Accoya factory
the market is expected to pick up.
Interest in Abodo, like Accoya based on New Zealand
radiata pine but in thermo-treated rather than acetylated
form, is also said to be gaining momentum in solid and
engineered form.
One thing importers were agreed on was that the
deferment of the introduction of the EU Deforestation
Regulation (EUDR) by 12 months is a positive.
“Inevitably the UK will be impacted by the Regulation.
Most UK timber imports are from the EU and not only
will timber and wood products placed on the EU market
have to be compliant, but also its exports,” said an
importer.
“Also, many of our customers sell their finished wood
products in the EU. All shippers will have to satisfy the
EUDR’s requirements for due diligence. It’s a complex
task and the EU has now accepted it needs to provide more
guidance and clarity”.
A leading international trader and distributor said they
would take the opportunity of the EUDR postponement to
work with suppliers to ensure they can provide the
compliance information required.
“The online platform for uploading EUDR due diligence
and geolocation information also goes live in November
which will enable us to act to suppliers as if the Regulation
is in place,” they said. “Together we can make this work.”
Looking forward to the hardwood trade in 2025 the view
of one UK importer reflected the consensus of the sector.
“Success will be down to maintaining customer service,
while strictly managing timber inflows”.
EUDR News
A press release from the European Parliament has
confirmed implementation of the EU Deforestation
Regulation (EUDR) will be delayed by a year to
December 2025 “so that companies can comply with the
law that ensures products sold in the EU are not sourced
from deforested land”.
The press release says:
“In response to concerns raised by EU member states,
non-EU countries, traders and operators that they would
not be able to fully comply with the rules if applied as of
end of 2024 the Commission proposed postponing the
application date of the deforestation regulation by one
year. The European parliament agreed to this
postponement as well as other amendments with 371 votes
to 240 and 30 abstentions”.
See: https://www.europarl.europa.eu/news/en/press-
room/20241111IPR25340/eu-deforestation-law-parliament-
wants-to-give-companies-one-more-year-to-comply
An amendment, introducing a “no-risk” country category
into the law was approved and the criteria for risk
assessment included. The press release says “no risk” is
defined as “countries with stable or increasing forest area
development” and such countries “would face
significantly less stringent requirements”.
This change has sparked criticism from environmental
groups for undermining the regulation’s
effectiveness. Critics warn that the “no risk” category
could open the way for resource laundering, where
products from high-risk countries could be routed through
no-risk nations,
See: https://www.euractiv.com/section/agriculture-
food/news/eudr-parliament-backs-no-risk-group-trade-partners-
accuse-eu-of-protectionism/
As of 15 November no formal statements from the main
timber trade associations or groups have been seen.
Environmental groups were quick to express
disappointment at the delay in implementation and of the
introduction of the no-risk category of countries.
For an early comments on the EUDR postponement and
key amendments see:
https://www.resourcewise.com/forest-products-blog/eudr-delay-
will-the-us-be-exempt-as-a-no-risk-country
and
https://www.reuters.com/business/environment/european-
parliament-approves-one-year-delay-eu-anti-deforestation-law-
2024-11-14/
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