Overcoming a Global Shortage of Wood

Posted on August 6, 2021

Overcoming a Global Shortage of Wood

A note from The Posh Shed Company CEO, Mike Sullivan Mike Sullivan CEO of The Posh Shed Company

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 and suppliers are now starting to ration timber and wood-based products to manufacturers.

Coping Strategy
We have been fortunate enough so far to avoid any material outages, but we have only been able to do this by leveraging our supplier relationships and micromanaging our timber usage. These actions have enabled us to secure our product pricing (for the time being at least), enabling continuity of supply and making sure that our lead-times to our customers are not unduly affected.

What is causing the supply of timber problem and how long is it likely to last?
In recent years, the UK has been lucky enough to have access to significant supplies of materials with extremely short lead times, this was accentuated further in 2019 due to significant stockpiling ahead of Brexit. In November 2020 it was reported that over 1 million m3 of timber and panel products were imported into the UK, 21% higher than the same month in the previous year and a 13 year high. The outbreak of Covid-19 forced many European sawmills to close and as a consequence, production was halted. 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 Timber ShortagesWorking from home

Unprecedented Demand
With over 46% of employed people working from home in April 2020, summer approaching and foreign holidays being cancelled, thoughts inevitably drifted to improving home environments to make the most of the additional time being spent there.

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.

The USA also saw a rapid surge in demand and subsequently turned their interests to the key sawmills in Europe, diverting their stock to the USA where prices have spiralled and continue to set new records.

Consumer demand for timber products in the UK is still very high, leaving 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 and most recently interruptions such as the “Pingdemic” where transport staff are required to self-isolate, delay supply further. 

In contrast China, the world’s fastest growing economy, has slowed from 18% annual growth to 6% and is falling. Should the Chinese economy take a turn and start 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?
It seems inevitable, given all the statistics available to us, that the difficult conditions being experienced in the supply of timber and building products will continue well into 2022. It is expected that we will start to see some relief as the UK’s demands reduce and we move into the winter months, but for the time being at The Posh Shed Company, it’s about “stringent control” of our material usage and working with our suppliers to ensure continuity of both the quality and supply of our timber requirements in the short term.

The Posh Shed Team member 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, and a real person will pick up your call, Monday to Friday, between 9am and 4.45pm. 01544 387101