Global timber shortage putting UK housebuilding supply chain under ‘enormous pressure’

Global shortage of wood puts UK housing supply chain under ‘enormous pressure’

Leading voices from the UK roofing industry have warned of the faltering availability and rapidly increasing costs of basic materials such as roof batten.

The National Federation of Roofers (NFRC), Avonside Group (including Avonside Roofing), Marley and SR Wood said global timber shortages have put “tremendous pressure” on the supply chain of the UK housing sector and represent a “serious challenge” for the industry as a whole.

The organizations expressed “serious concern” about “extremely low” available supplies of European softwood (the raw material used to produce UK roof batten) at a time of persistently high demand from the housing sector, which continues to recover from all disruption. caused by the pandemic.

The shortages fuel steep and rapid cost inflation for roofers, forcing them to make a choice about paying the rising cost of materials (knowing they can’t pass the rise on to their customers). They are also running out of materials as the housing supply chain struggles to hold back the flow of global factors that are well beyond the UK’s control, the organization added.

Demand from the three largest world markets, China, America and Russia, has contributed to a situation that can take months to stabilize and years to fully recover.

China is the world’s largest importer of coniferous and hardwood logs, half of which comes from imports. The country has been hit hard by factors such as flooding and the imposition of increasingly stringent forest protection measures, which have nearly halted domestic logging. China has looked to Europe and other regions for additional supplies, following the announcement that Russia is proposing a ban on exports of softwood logs and valuable hardwood logs.

North America is still reeling from the first pandemic lockdown, closing half of Canada’s and a third of US sawmills. This led to a halt in US and Canadian exports to the world market – and the US timber industry lost an estimated $ 1.1 billion in 2020 due to wildfires, hurricanes and the pandemic. As a result, imports are at their highest level in 15 years.

Russia is the world’s largest exporter, but the proposed export restrictions are already affecting the global timber market – and especially its relationship with China.

Despite sawmill closures during the first lockdown in Europe, the main producing countries (such as Sweden) have maintained and in some cases increased production. However, within a few weeks, Europe became the world’s largest exporter of sawn coniferous wood. In Scandinavia and Central Europe, prices for sawn timber, as well as route and transport costs, are increasing rapidly. Anecdotal feedback from industry sources highlights stories of gazumping, where commodity sellers forgo orders in favor of higher offers. It’s a seller’s market!

These effects, along with the strong growth of DIY and gardening projects during COVID lockdowns, robust building rehabilitation, and shipping and freight issues, all work together against a return to sufficient available wood supply.

For roofers, the biggest impacts are on costs and productivity. Delays in the supply of materials such as battening pose a real and serious risk to housing builders’ production schedules, the financial consequences of which can be serious. However, the costs of avoiding such delays in the supply chain can itself be significant.

Eddie Stanton, CEO of Avonside Group said: “The price of roof batten is increasing monthly, already more than 50% in the last six months, and delivery times are getting longer. This puts enormous strain on the housing supply chain, especially roofers, in terms of what price increases they can accommodate and what they have to pass on. “

The industry’s leading wood slat suppliers are committed to keeping their customers up to date with current inventory, lead times and prices.

Thinking about Marley’s position in relation to the JB Red wood brand, the company director of roof systems Stuart Nicholson said: “The global / US pressure from increased timber demand has exacerbated the supply problems caused by the pandemic and Brexit. That is why it remains a huge challenge to find the raw materials needed to produce and deliver end products. Marley has strong relationships and a robust supply chain with more than 60 timber factories. But even considering this, current demand is outstripping supply. This has a serious knock-on effect on global coniferous wood prices, which are constantly rising.

“Those in the UK supply chain are working hard to secure greater supplies of raw materials and finished products. It’s important to work together, with home builders engaging with their suppliers and subcontractors to understand the challenges and plan ahead. “

Shaun Revill, SR Timber Trade Director said: “We are in the very fortunate position of having our own dedicated sawmill in the Baltic states, which means we have our own robust supply chain – but even that has recently been tested to the limit with Brexit and COVID, and that are we’re not isolated from what’s going on worldwide.

“We have been very proactive and transparent with our customers and provided them with a lot of information to explain the situation regarding stock availability – which currently has a lead time of about ten days – and price movements. This has been well received when you put into context that the industry has not seen anything like this since World War II. “

James Talman, CEO of the NFRC, said: “We are currently seeing unprecedented shortages of roofing materials, especially wood. This is due to a whole host of different reasons, from COVID-19 restrictions to the impact of the low US timber supply. Our data shows that two-thirds of roofers saw material availability deteriorate in the first quarter of the year and 89 percent reported price increases. Wood battens were the second-highest material shortage after tiles, with a third of contractors reporting shortages. Unsurprisingly, this is the number one concern for roofers – over COVID and Brexit.

“While our suppliers are doing everything they can to reduce shortages, it will be a while before we have a stable supply again, and homebuilders must therefore work with roofers to plan ahead, build in lead times, factor in price increases and provide flexibility. in contracts. “

According to a recent statement by the Construction Leadership Council’s (CLC) Product availability group.

SR Timber noted that even if sawn timber production is able to meet European demand, thanks to the very wide availability of forests, it will take longer than usual to fulfill orders, while at the same time minimizing stock in sawmills is being restored.

All of this means that roofers have to plan material supply further and further in advance, in the hope that the battens suppliers can meet the expected volumes. When shortages do occur, they are usually last minute and at the expense of production time, with further cost implications due to the need for alternative sourcing.

In many cases, the rising slat prices and added costs associated with dealing with material shortages will be unsustainable if the burden is not shared, and that could only hurt UK housing production in the short term.

The NFRC, Avonside Group, Marley and SR Timber all agree that the roofing and housing industries need to work together to cope with these rising costs to ensure that contractors and battens suppliers can afford to purchase the materials that essential to continue to put roofs on the houses that Great Britain requires. .

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