As we near the culmination of our third UK lockdown, it is impossible to ignore the detrimental effects this past year has had on almost all businesses. And although 2021 may sow the seeds of emerging back into normality, it is looking to be a bumpy return for the construction industry.
We are committed to keeping our customers well informed at all times regarding any company updates or adjustments in order to never leave you in the dark. For this exact reason we want to take the time to explain the many factors at play hitting the construction and housing industries on all fronts and contributing to our price increase.
Unfortunately the outbreak of Coronavirus (COVID-19) acted as a huge restraint on timber processing throughout 2020 as supply chains were disrupted due to the implementation of trade restrictions and national lockdowns imposed by local governments, resulting in some mills limiting shift work in order to comply with social distancing rules. Consumer demand for timber products in the UK remains staggering, leaving little opportunity for sawmillers to catch up and restock to the levels previously held prior to COVID-19, cases are sadly still surging in many countries around the world, including Sweden – the UK’s largest timber-supplying partner consistently taking well over 40% of the business.
The increase in cases has resulted in a tightening of operating conditions and interruptions where transport staff are required to self-isolate, adding to an already strained situation. Because mills in countries like Lithuania and Latvia went into lockdown for two months they were unable to cut, mill or treat timber, causing their stocks to completely run down.
Although this could not be avoided and our customers’ safety remains at the forefront of our minds, these disruptions have led to supply shortages and unfortunately price increases around the world – including at Nuneaton Roof Truss.
“Here at Nuneaton Roof Truss, we really hope that our customers can understand the difficult situation we have found ourselves in, we are putting our all into providing the volume of timber in demand at a fair price. As we near the final stretch of this third national lockdown we must remember we are all in this together and we shall get through this together”Scott McEwan, Founder & Director
Lockdown DIY Demand
Price increases have been further spurred on by strong demand amid a boom in home remodelling and construction during lockdown, fuelled by home orders the stay-at-home lifestyle has encouraged homeowners to expand or remodel their existing surroundings. The onslaught of demand has handicapped producers’ abilities to restock inventories quickly enough to fulfil demand, additionally supporting price increase.
In addition, the USA (who are by far the world’s largest country and economy) saw a high-speed surge in demand which could not be maintained through their already established supply chains. Housing starts in the USA have reached an annualised figure of 1.6 million and are expected to continue to increase. Demand for timber has grown accordingly pushing prices to record levels with potential for further substantial increases. This has led to key suppliers of Europe diverting their stock to the USA. In contrast China, the world’s fastest growing Economy, has slowed from 18% annual growth to 6% and falling.
The shortage of C24 timber across the UK and Ireland (which is of a much higher standard than that of C16) has resulted in many large merchants unable to risk having gaps on their shelves and are therefore prepared to pay whatever it takes to secure the required volumes. For homebuilders and renovation contractors, this has pushed the cost of projects far higher than it was in early 2020 – softwood lumber prices are now totalling around 112% higher than they were a year ago. Supplies of C24 remain tight, as demand is strong in the UK and overseas and merchants are looking to build stock. Against January last year, C16 and C24 prices gained between 60-70% but still traders are sure that a peak has yet to be reached.
This mass increase in timber cost around the globe has unfortunately led to a sudden price increase at NRT, but as a company we are doing everything to ensure our operations are efficient as possible in order to keep our prices to you, our valued customers, as low as we can.
We hope you can continue to support a family run business and understand how these price increases are ultimately an industry wide issue that’s affecting everyone.
If you’re interested in our industry-leading, eco-friendly services, click here to get a quote today.