Economic downturn still hitting UK wood producers

 A survey of UK forestry and wood-using businesses has highlighted declining business confidence, rising costs and declining activity. The survey, undertaken in January by ConFor and the Scottish Forest Industries Cluster, in partnership with UK Forest Products Association and the Wood Panel Industries Federation, is a pilot that will, from February, be conducted monthly with a larger sample of businesses. The information collected will be made available to governments and their development agencies across the UK, and will be used to support calls for action by government.  “The survey results were less bleak than expected” commented Stuart Goodall, Chief Executive of ConFor, “though with expectations so low, that is little comfort. A clear majority of companies expect things to get still worse”.

Even with a significant weakening of the pound, a decline in oil prices and, in the near future, a reduction in energy prices, there is little in the survey to offer cheer to UK forest owners and wood-processing businesses. Unit costs are up significantly, business activity and sales levels are generally in decline and confidence is low. A few companies have reported some recovery in volume sales, but prices are low and, generally, not predicted to recover soon. 

Most businesses have seen a rise in inputs costs of up to 20%.  A third expects to make a financial loss for the year. Optimism is understandably hard to find, though a small minority of companies is predicting increased business activity over the next 12 months. Working hours have been reduced in the majority of companies and nearly half has reduced staff numbers.

The output from the survey is available to view on ConFor’s website at http://www.confor.org.uk/Upload/Documents/22_EconomicSurvey_Pilot_Summary_Jan09.doc  The next survey is due to take place in mid-February.

ConFor (Confederation of Forest Industries) represents forestry and wood-using businesses from nurseries and growers to wood-processing end-users. http://www.confor.org.uk/