The timber industry in 2016: our predictions

on 23 February, 2016

January is always a busy time for timber merchants, and at Arbor Forest Products we have been run off our feet helping customers get ready for a successful year in 2016.

There have been a number of noticeable trends that look set to shape the rest of this year for everyone in the timber industry.

Here are our predictions for the year ahead:

MDF isn’t going away

The rise in popularity of MDF has been edging out softwood’s market share for a number of years, and this trend is showing no signs of abating.

Despite the long-standing love affair merchants have with traditional timber products, more and more firms are embracing MDF. However, this is not to say that the death knell has been sounded for softwood. In fact, we hope merchants will work hard to raise expertise and encourage passionate timber advocacy more than ever before, in order to ensure traditional products can continue to compete with the versatile MDF offerings now available.

Merchants will focus on customer needs

The timber industry’s high levels of customer service ensure customers can obtain the products they ask for more easily than ever before. But the ongoing rise in expertise among merchants, fuelled by more access to staff training, is causing a shift in the way merchants interact with customers.

One example of this shift is in composite decking – a product that few merchants were savvy about until relatively recently, given that it is not strictly a timber product. But now, merchants can recommend the benefits of products like Trex to customers who really need them, ensuring customers get a better result, while merchants take advantage of a growing market.

Training is going to be key

At Arbor Forest Products, we offer several types of customer training, from face-to-face courses, online training programmes, and specialist courses with third parties.

In 2016, we have seen unprecedented demand for those courses, and, with the job market tightening, companies need to train existing staff rather than recruit in order to move forward.

Given the high margin ratio of timber, many merchants have a growth strategy in place to improve timber sales, and training is an essential component of that.

The demand for flexible order quantities will continue

During the recession, people were trying to reduce stock levels and they wanted lots of different products from same distributor to make up minimum order values.

Arbor Forest Products’ Warehouse On Wheels service brought the key benefit of being able to order as much or as little of any product, and have it all arrive in one delivery.

In 2016, the market is improving, merchants are doing well, and while the issue of minimum order quantities remains, the demand for flexible and efficient deliveries is increasing because of the logistics benefits they offer.

Merchants need to get products out quickly and efficiently. By streamlining the process and reducing the number of wagons carrying product, merchants can make cost savings and also dramatically improve the health and safety of their operations – an area that is coming under closer scrutiny than ever before.

Timber prices will remain volatile

For the last 18 months, timber prices have fallen significantly, due to the strength of the pound making imports cheaper. However, in the last couple of months, the pound has weakened against some currencies, causing the trend to reverse, and in real terms that has increased the prices at the sawmill gate.

Given the uncertainty over Britain’s place in the European Union in 2016, it is highly likely that currencies will continue to be volatile, and there is a good chance that the trend of the past year-and-a-half will continue to unravel.

Jason Ostler is commercial director at Arbor Forest Products.

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