Business survey sets benchmark for confidence in the UK joinery industry
Published: 17 June, 2016
With just days to go before the EU Referendum, business confidence is under close scrutiny in the joinery manufacture and woodworking industry.
Fears around market demand, the state of the UK construction industry and the availability of skills and labour remain the biggest issues that can sap this confidence, according to the latest British Woodworking Federation (BWF) Joinery State of Trade Survey.
Iain McIlwee, BWF chief executive, said: “The BWF’s membership has supporters in both camps, for Vote Leave and Remain. This reflects the diversity of our members and their interests, from the largest international joinery manufacturing firms to the most locally-focused SMEs.
“Only time will tell the impact of the EU Referendum. But this market research will be our benchmark – we will soon be able to tell if the joinery industry has suffered a knock or is buoyed by new energy post 23 June.”
The BWF Joinery State of Trade Survey Q1 2016 indicated a rise in sales volumes since the previous quarter, and an increase in the number of companies who reported a current order book of future work extending beyond three months.
Manufacturers were mostly confident that sales volumes would improve in the months leading up to the Referendum, with 68% predicting an increase over the coming year. Almost half of respondents on balance reported increasing their labour force in the last 12 months, with just over half also anticipating more recruitment over the coming months. Investment in product improvement had also been increased by 59% of companies on balance over the past year, with 64% saying they would boost investment over the next year.
However, the report also noted that increases in wages, energy bills and the price of raw material have inflated unit costs, and Mr McIlwee warns of other risks to come, regardless of the Referendum result: “Decent sales volumes and encouraging levels of investment have helped the industry stay lean and efficient despite some cost increases. What matters now is to be prepared for the risks that the new economic reality presents.
“The reality is that many businesses now have less cash behind them than five or 10 years ago and this changes the risk profile. Poor payment, project slippage and contractual risks - particularly the harsh retention clauses that are often unfairly imposed by larger contractors - can bite fast and there is little money to throw at a dispute. So it's essential that risk is factored in and contracts managed to ensure that a viable business doesn’t run dry of cash.”