A Global Shortage of Wood
A Note from The Posh Shed Company CEO, Mike Sullivan
This has been an interesting year for The Posh Shed Company in so many ways. As if global pandemics weren’t enough, now we are facing unprecedented global supply chain issues that affect any industry whose primary consumable is timber. Timber prices have risen by a staggering 100% since January 2021 due to a global shortage of wood. Because of this suppliers are now starting to ration timber and wood-based products to manufacturers.
Timber Shortage Coping Strategy
We have fortunately managed to avoid any material outages so far. However, we have only been able to do this by leveraging our supplier relationships and micromanaging our timber usage. We have managed to secure our product pricing (for the time being at least), enabling continuity of supply. Thankfully, our customer lead-times have not been unduly affected.
What is Causing the Global Shortage of Wood Problem?
The UK has been lucky to have access to significant materials supplies with extremely short lead times in recent years. Significant stockpiling ahead of Brexit accentuated this further in 2019. Reports in November 2020 stated that over 1 million m3 of timber and panel products were imported into the UK. This was 21% higher than the same month in the previous year and a 13 year high. The start of the Covid-19 outbreak forced many European sawmills to halt production and close. Unfortunately, the surpluses washing around in 2019 did not compensate for the loss of production in Q2 2020. Solid wood imports were 8% below the same period in 2019 and panel product imports were 15% lower.
Global Shortages of Wood Supplies
Over 46% of employed people were working from home in April 2020. Thoughts inevitably drifted to improving home environments as summer approaching and foreign holidays faced cancellation. People were spending additional time at home so looked to their gardens to make the most of that time.
Directly impacted by these effects, most markets across the developed economies saw a drastic acceleration in demand for building materials, mainly for DIY and garden projects, leaving Britain’s supply chain depleted with little stock left for manufacturing sale.
People were spending more time at home so looked to their gardens to make the most of that time.
The USA also saw a rapid surge in demand. They subsequently turned their interests to the key sawmills in Europe, diverting their stock to the USA, compounding the global shortage of wood. US prices have spiralled and continue to set new records.
Consumer Timber Supply Demand
Consumer demand for timber products in the UK remains very high. This leaves hardly any opportunity for sawmills to catch up. COVID-19 cases are still surging in many countries around the world, including Sweden, the UK’s largest timber-supplying partner. The increase in cases has resulted in a tightening of operating conditions. Transport staff had to isolate due to The “Pingdemic” further delaying supplies.
In contrast China, the world’s fastest growing economy, has slowed from 18% annual growth to 6% and is falling. The problem will come if the Chinese economy starts to boom again and demand from the USA remains high. The rest of the world will continue to see shortages and a rapid price inflation.
What is the Future of Timber Supply in Britain?
The statistics are clear. The difficult conditions experienced in the supply of timber and building products will inevitably continue well into 2022. We expect to start to see some relief as the UK’s demands reduce and we move into the winter months. However for the time being at The Posh Shed Company, it’s about “stringent control” of our material usage. In addition, we will work with our suppliers ensuring continuity of both the quality and supply of our timber requirements.
If you are thinking about enquiring about our range of Posh Sheds and Back Door Stores, don’t hold back! Our friendly team are here to answer your questions and advise you on your choices. What’s more, a real person will pick up your call, Monday to Friday, between 9am and 4.45pm. 01544 387101
