Imports of the main timber and panel products for the first two months of 2024 are fractionally ahead of the same period in 2023, up by 0.2% (3,000m3) following improvements in February after a disappointing January start. Overall, however, volumes remain subdued in line with weaker construction output and a generally lacklustre economy.
 
With two months of data now available for 2024, we can see a more realistic reflection of the performance in the various timber product groups. Softwood, hardwood, particleboard and MDF have all experienced lower volumes compared to the first two months of 2023, whereas plywood, OSB and engineered wood products are currently ahead of last year. Solid wood imports were 2% lower than in the first two months of 2023, while imports of panel products were nearly 5% higher, largely due to big increases in imported hardwood plywood driven by imports of eucalyptus-faced plywood from China.

According to the most recently released HMRC statistics, softwood plywood imports have experienced a 23.8% fall compared with January-February 2023. These statistics suggest the first two months of 2024 have been the worst start to a year for softwood plywoods since 2012 – mainly due to a poor January.

Concerningly, however, this is not being reflected in the coniferous plywood quota – which as of 2 May 2024 currently only has 4% remaining. TDUK has raised a challenge with HMRC to resolve this clear discrepancy between the trends apparent in their import statistics and the remaining quota. We will be closely monitoring these statistics and will update our members on HMRC’s response as soon as possible, as well as creating a Trade Note to keep all members informed.

It’s also important to note that recent Office for National Statistics (ONS) data reveals a 15% reduction in new homes started during 2023 compared with 2022, ending a generally rising period of housebuilding growth since 2011.

Despite volumes in 2023 returning to levels last seen in 2015, housing starts were still better than many had forecast. With housebuilding being an important market for timber products, and softwoods in particular, we tend to see correlations between housing starts and softwood imports. More recently, softwood import volumes were high in 2021, as were housing starts, while in 2023 softwood volumes remained low as housing starts fell.



TDUK Head of Technical and Trade, Nick Boulton, said:

“At the end of 2023 and early 2024 the UK tipped into a modest ‘mini’ recession, but unlike the destructive recessions we’ve seen in recent decades this one was thankfully shortlived, and economic indicators for 2024 have improved in recent months.

“Good growth in housebuilding tends to follow a recession and this has been evident over the last 50 years of UK housebuilding. Despite the downturn in 2023 and in 2020 because of the pandemic, the trend for housing starts over the last dozen years has been positive and would have been significantly better had these and other recent obstacles to growth not occurred.

“Albeit largely anecdotal for now, we are seeing improvements in the number of enquiries received by housebuilders, and the likelihood of a softening in interest rates and more upbeat build forecasts from some housebuilders suggests that housing starts for 2024 may be better than predicted, although still likely below the overall 12-year trend. However, if better than expected housebuilding transpires in 2024, this is likely to result in better-than-expected volumes of timber imports, particularly in the softwood sector.

“Much still depends on the upcoming election, and how both the current government, and any new government, invests in continuing to promote the Timber in Construction roadmap to help encourage further take-up of timber as a core building material.”

Source: TDUK