Despite modest increases, timber imports have not returned to expected levels, reflecting underlying economic challenges.
- Analysis shows only a 0.2% rise in timber imports in early 2024 compared to the previous year.
- Overall import volumes are influenced by weak construction outputs and a lacklustre economy.
- Notable drops in softwood and hardwood import volumes contrasted by increased panel product imports.
- Economic indicators show improvement, with potential for increased house-building activities.
The importation of timber and panel products has seen a minute increase of 0.2% in the first two months of 2024 compared to the same timeframe in 2023. However, these import figures remain low, mirroring the tepid pace of construction activities, particularly in the house-building sector, and the broader economic stagnation. Softwood, hardwood, particleboard, and MDF imports have all declined when compared to early 2023, although there has been some growth in imports of plywood, OSB, and engineered wood products.
Specifically, solid wood imports recorded a 2% reduction from the preceding year, while imports of panel products showed a near 5% increase. This growth in panel products is significantly driven by a surge in hardwood plywood imports, especially those involving eucalyptus-faced plywood from China. According to the recent HMRC data, the imports of softwood plywood have notably decreased by 23.8% when juxtaposed with January-February 2023. Such statistics highlight that the start of 2024 has been less favorable for softwood plywood imports, marking the lowest point since 2012, primarily due to a particularly unproductive January.
Nick Boulton, head of technical and trade at Timber Development UK, remarked on the economic climate at the tail end of 2023 and early 2024, describing it as a slight ‘mini’ recession. Unlike the more catastrophic recessions experienced in previous decades, this economic downturn was brief, and indicators are now showing more positive signs for 2024. Historically, a growth pattern in house-building tends to follow such recessions, a trend seen over the past fifty years in the UK. Despite downturns in 2023 and earlier in 2020 due to the pandemic, the trajectory for housing starts over the last twelve years has been generally positive, hindered primarily by recent challenges to growth.
Boulton also noted that, although largely anecdotal at this stage, there has been an uptick in enquiries directed at house-builders. This improvement, alongside potential reductions in interest rates and optimistic building forecasts from certain house-builders, suggests that housing commencements in 2024 might exceed initial predictions, though likely still falling short of the long-term trend observed over the past twelve years. If these projections materialise into a better-than-anticipated increase in house-building activities in 2024, it would likely prompt a corresponding rise in timber import volumes, particularly in the softwood segment.
Timber import volumes may improve if UK house-building recovers beyond current expectations in 2024.
