25/11/2024
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The BWF Joinery State of Trade Survey Q1 2015 indicated that sales expectations remain encouraging and fuel costs are less of a concern but the availability and cost of labour has become more of a constraint on business. BWF Policy Executive Matt Mahony commented on the survey results:
“Wages and salaries are now having more of an impact an effect on increasing unit costs and constraining business, although this may come as little surprise given a steady rise in direct employment and ongoing concerns about a shortage of skilled labour. Raw materials costs remain at a consistently high rate of increase although fuel and energy costs are having less of an impact in driving up unit costs than at any point since the Joinery State of Trade Survey began.
“Anecdotal evidence has suggested that there is a lot more work about at the moment but margins are still minimal for a number of companies and cash flow remains difficult. Potential clients have also been reluctant to commit to investment in Q1 which has been holding back orders.
“The 2015 election result, which was more decisive than many expected, should lead to more confidence in investment over the next few months as outlay plans delayed until after the election can now be realised and we are seeing some continuity in terms of policies.
“What this is likely to mean for new housing and RM & I work remains uncertain though. This will depend on the extent to which government is committed to build more housing stock and stimulating work on retrofitting the existing building stock – the UK's current housing stock is amongst the least energy efficient in Europe, and responsible for nearly a quarter of our annual carbon emissions.
“We would urge government to do all they can to help our sector build a sustainable future. All new ministers, government stakeholders and MPs in member constituencies are receiving a brief introduction to the industry through BWF, together with an outline of what we need from government to support a growing, competitive joinery industry.”
Key points from the BWF Joinery State of Trade Survey Q1 2015 included:
– A balance of 46% of joinery companies reported an increase in sales volumes for Q1 2015 compared to the previous quarter. This follows on from 42% of joinery companies reporting an increase in sales volumes in Q4.
– Manufacturers were very confident that sales volumes would improve, with a balance of 58% predicting an increase in Q1 2015, and a balance of 65% predicting an increase over the next year.
– 73% of respondents had been using more than 70% of their manufacturing capacity in Q1 2015, compared to 55% of respondents over Q4. 65% of respondents indicated they would be using over 70% capacity over the next quarter, with 69% over the next year.
– 39% of respondents noted an order book between 1 and 3 months, with the 32% of respondents reporting an order book extending beyond 3 months.
– 32% listed demand as a likely constraint on activity over the next year (just down from 33% in the previous survey), with capacity availability listed by 27%. Labour availability was the next significant constraint, at 24%.
– Raw material costs increased for 78% of respondents on balance, with wages/salaries reported as having the next highest increase (at 73%) having increased sharply as a cost factor over the last two quarters.
– 26% reported that energy costs had been a factor in increasing unit costs, but this increase was at a slower rate than had been reported since the survey began in. A balance of 35% of respondents reported a drop in fuel costs, the second successive quarter of decline.
– Investment in product improvement had been increased by 56% of companies on balance over the next year, with a balance of 62% having boosted investment over the previous year.
– 64% of respondents on balance were planning to boost manufacturing equipment spending with 40% having increased spending over the previous year.
BWF members can log in and view the full survey report and the latest industry information and forecasts here: www.bwf.org.uk/publications/market-research
