Timber and steel prices have been driven up by a perfect storm of economic and geopolitical circumstances. Nuneaton Roof Truss is working hard to deliver value despite commodity inflation.
As the world gets back to normal in the wake of the coronavirus pandemic, commodity prices, including steel and timber, have risen. Driven by work shutdowns across the world, supply chain breakdowns, and emergency government spending that has fuelled inflation, key commodities have shot up in cost, causing problems everywhere, not least in the construction sector.
In truth, everyone is feeling the pain: gas and oil prices are up on international markets, driving up not only costs for consumers but also for industry. Inputs are expected to remain high, too: an April 2022 World Bank report said costs of production and extraction of a range of raw materials, from wheat to oil, are rising. According to its forecasts, energy prices will increase by 50% over a year and will only start to fall in 2023. It also forecast the price of gas will double in 2022 compared to 2021, while coal is expected to increase by 80%.
Such is the chaos that even traders have been caught out: in March, the London Metal Exchange temporarily halted nickel trading in the face of wild price swings.
Key building materials such as timber are not unaffected by our volatile post-Covid geopolitical environment. Indeed, a key one, timber, has been something of a bellwether for inflation. The knock-on effect has been felt not only by home builders, but also buyers, helping drive house prices to all-time highs.
Wood prices see-sawed in 2021 and 2022. US prices peaked in May 2021, with the cost of softwood hitting over $1,600 (approx. £1,500) per thousand board feet. It later fell to under $600 (approx. £475), but is now on the rise again, hitting $1,000 (approx. £790) in the face of supply chain disruptions.
In Britain, prices have been no less volatile. Official statistics from the government body Forest Research state that the Softwood Sawlog Price Index was 61.8% higher in real terms (59.5% higher in nominal terms) in the six months to September 2021, compared with the corresponding period of the previous year.
The average price for softwood sawlog sales was £79.39 per cubic metre overbark in nominal terms in the six-month period to September 2021, an increase from £67.70 in the six months to March 2021. The Spruce Sawlog Price Index and Other Conifer Sawlog Price Index were 41.2% and 65.3% higher respectively in real terms (43.2% and 67.5% in nominal terms) in the six months to September 2021, compared with the corresponding period of the previous year.
Meeting the challenge
This causes obvious problems for the construction sector, driving up input costs and, ultimately, making houses more expensive for the end buyer.
Crucially, raw commodity prices have not simply risen, they have see-sawed, rising and falling with supply.
While Nuneaton Roof Truss cannot control timber prices, we are committed to driving value for our customers. We do this by ensuring we do not get locked in to paying high prices even as costs drop, then passing on any savings to our customers.
Nuneaton Roof Truss has responded to this by ensuring its purchasing process is nimble and never gets locked into overpaying.
Sales manager Josh McEwan explained that it is not uncommon for manufacturers to sign long contracts that do not respond rapidly to prices when they fall.
“We have always been upfront with our customers regarding timber prices, this has allowed us to grow existing business relationships as well as creating new ones. I believe communication is key and that’s why we notify all our customers as soon as possible,”said Josh.
By passing the best prices on to customers, Nuneaton Roof Truss demonstrates its commitment to being a real partner to the home building industry. We want you to succeed, and do everything in our power to ensure that you will.
Why choose Nuneaton Roof Truss?
Nuneaton Roof Truss is the manufacturer of choice for all engineered timber requirements. Whether you’re planning one house or many, housebuilders, and construction firms all over the UK put their trust in us.If you’re interested in our industry-leading, eco-friendly services, click here to get a quote or call us on 02476 327722 to find out how we can support your business and projects