I think we can all say that we have never experienced trading conditions like the last 12 months.
With COVID-19 hitting the UK early in 2020 we saw the situation develop from the first lockdown where 60% of customers were closed to within a couple of months (and where we still are today) with all being open, albeit in some cases with limitations on opening times etc.
Most businesses lost at least 30% of their turnover in April and May 2020; initial estimates at the time were if the market returned to normal trading quickly it would take at least 18months to recover.
But the reality has been very different. Many companies are actually doing well, if even for the short term, and have recovered lost ground very quickly with significant increased levels of business during the summer of last year. Although much was primarily driven by the DIY market, nevertheless much building also resumed. Timber and Plywood has sold well in 2020, most merchants have been trading successfully though timber prices, especially in softwood products have increased to levels not experienced in living history and availability has been, and remains to be, extremely tight. There were some shortages that started towards the end of July as many businesses had cut back on contracts/forward orders as reducing stock is a quick fix to reduce overhead and outgoings during the pandemic. But since then, supply has not improved and the current market shows it’s more about having stock availability than it is about price. From a personal perspective, over the 34 years that I’ve been in the trade this is the busiest I’ve ever been.
Container rates are sky high at the moment so importers who ship by container had tough decisions to make – many companies had very little appetite for increasing purchases before Christmas, at that point without knowing if we’d have a trade deal or not with the EU as there was a huge risk. If demand had stayed at pre-Christmas levels, we would certainly be experiencing more shortages than we are currently, though demand and trade in January hasn’t really started properly yet so time will tell when it does.
COVID-19
The early part of 2020 was pretty miserable for most traders, however if you were open and connected with the DIY sector then it was very decent business.
Despite the pandemic trade bounced back significantly in the 2nd half of the year and it is clear that most of the Timber Trade has had good times over recent months. The future remains uncertain but at least businesses are back in action – for now. Of major concern is the alarming increase in the infection rate across the UK, Europe and beyond especially with the new strains of the virus. As current restrictions will inevitably continue to be applied for some time, this will have a significantly detrimental affect on business. The vaccine rollout will clearly take some time, and we hope will provide an answer and a return to some form of normality in the coming months.
BREXIT
Since March last year this bane of our lives seemed to take a back seat as more pressing issues were addressed with the virus. The 11th hour deal will certainly help the UK economy as markets don’t like uncertainty and we have all been affected by currency fluctuations. It is early days and there remains much confusion in the market with regards to customs/duty/deliveries etc. and the TTF is doing a sterling job in guiding its members through the turbulence. There remain uncertain times ahead, coupled with rising COVID-19 cases right across the UK and Europe.
Most businesses have plenty of products purchased ready to ship so I believe availability will slowly improve though pricing remains extremely difficult for anyone in the Timber Trade.
EATTA remains in a healthy position financially despite the last 12 months and we are ready to continue with our projects as soon as we are able to do so. Despite the restrictions in 2020 we were able to support Anglia Ruskin College by supplying plywood for their project to create a pavilion – further details on our website. We will resume our WTTT projects and other projects to assist customers to specify the right quality, grade and specification of timber and timber products and we have a wealth of knowledge and experience within the region to be able to do so.
We have all had to adapt to virtual meetings throughout 2020 and this will remain the ‘norm’ for some time. Though sadly we had to cancel 2020’s Annual Dinner, we hope to be able to return to King’s College this September. Whilst our recent meetings have all been virtual, nevertheless they have been very well attended, informative and vibrant. Our Committee has excelled in stepping up to the circumstances and I wouldn’t have been able to perform as Chairman without theirs and the Secretary’s continued support and input.
Richard Fatkin
Chairman