Weaker UK Construction Output Drags Down Imports of Construction Materials

Analysis by Timber Development UK (TDUK) reveals that UK imports of main product groups are up by just 0.2% for the first two months of 2024 when compared to the same period in 2023, The Construction Index reported on Wednesday.

However, overall volumes remain depressed in line with weaker construction output—particularly homebuilding and a generally lackluster economy. According to TDUK analysis, softwood, hardwood, particleboard, and MDF all experienced lower import volumes when compared to the first two months of 2023.

On the other hand, plywood, OSB, and engineered wood products are currently ahead of last year. Solid wood imports were 2% lower than the first two months of 2023, while imports of panel products were nearly 5% higher, largely due to big increases in imported hardwood plywood driven by imports of eucalyptus-faced plywood from China.

According to the most recently released HM Revenue and Customs statistics, softwood plywood imports have experienced a 23.8% decline compared with January–February 2023. These statistics suggest the first two months of 2024 have been the worst start to a year for softwood plywoods since 2012 (mainly due to a poor January), The Construction Index said.

TDUK head of technical and trade Nick Boulton said:

“At the end of 2023 and early 2024, the UK tipped into a modest ‘mini’ recession, but unlike the destructive recessions we’ve seen in recent decades this one was thankfully short-lived, and economic indicators for 2024 have improved in recent months.

Good growth in homebuilding tends to follow a recession, and this has been evident over the last 50 years of UK homebuilding. Despite the downturn in 2023 and in 2020 because of the pandemic, the trend for housing starts over the last dozen years has been positive and would have been significantly better had these and other recent obstacles to growth not occurred.

Albeit largely anecdotal for now, we are seeing improvements in the number of enquiries received by homebuilders, and the likelihood of a softening in interest rates and more upbeat build forecasts from some housebuilders suggests that housing starts for 2024 may be better than predicted, although still likely below the overall 12-year trend. However, if better than expected homebuilding transpires in 2024, this is likely to result in better-than-expected volumes of timber imports, particularly in the softwood sector.”