Statistical Review 2015

Transcription

1 Statistical Review 2015 Industry Facts and Figures for the Year

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3 CONTENTS THE YEAR 2014 A Year of Rapid Advance 5 STATISTICS AT A GLANCE 7 Consumption by Volume and Value 7 Consumption by Volume and Value by Source of Supply 8 SOURCE OF SUPPLY - Country and World Region 11 Consumption by Volume 11 Consumption by Value 15 UK IMPORTS 17 UK EXPORTS 19 UK PRODUCTION 21 UK CONSUMPTION OF TIMBER AND PANEL PRODUCTS 22 By Volume 22 By Value 23 Share of Consumption by Value and Volume by Product 24 WOOD - Among The Leading UK Industries

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5 The Year 2014 A Year Of Rapid Advance The year 2014 was one where the timber industry made significant progress on many fronts. The growth in industry sales was at its highest level for many years. Further improvements in responsible purchasing, through the TTF s Responsible Purchasing Process, confirmed the industry s commitment to legal trading. Perhaps the most far-reaching advance was industry s agreement to form a unified body of the many timber industry representative organisations to speak for the industry with one voice. Plans laid in 2014 bore fruit on 10 June 2015 with the launch of the Confederation of Timber Industries (CTI), to an enthusiastic audience at the Building Centre, London. The industry has waited a long time to find a strong representative voice to act as an umbrella organisation for the UK s timber supply chain, from forest to end-of-life recycling. So this was a great moment for the timber industries to showcase and demonstrate their combined strength. The industry needs to move to the top of the agenda, with specifiers, designers and constructors opting for timber products as the material of first choice. CTI will represent the UK s producers, manufacturers and distributors of timber and wood-based products, from a membership which includes large multi-national companies and key trade associations representing the industry supply chain. The timber supply chain contributes substantially to the UK construction and manufacturing industries, providing jobs across the skills spectrum and adding value of circa 20 billion to the UK economy. CTI will focus on a number of key projects to influence the development and growth of construction, housing and interiors using wood-based products, and growing the UK s low-carbon economy. Understanding the growth prospects and competitive pressures towards 2025/30 will be a key project for CTI and its members, who will work together to map and assess the value and growth prospects of the industry s supply chain. The research, science, development and employment of such a universal material demands a highly skilled and knowledgeable workforce across the entire supply chain. Pressure for skills across the industry will grow in line with population increase. Consequently, CTI needs to ensure that timber leads the way in 21st Century construction and related industries. 5

6 The Year 2014 A Year Of Rapid Advance It has been a truly significant moment to see the industry join forces and create a growth agenda that includes paper and furniture manufacturing industries as part of the joined-up approach, not just timber in construction. The new Government has a huge agenda and a significant construction and housing challenge and, through our support for CTI, we need to show a consolidated approach when we put forward our case for growth. Timber has a central part to play by building with carbon and growing our new low-carbon economy. The development of the CTI comes at a time when further evidence of the growing importance of the timber industry in the UK has emerged. The Annual Business Survey (ABS), which quantifies the turnover of British businesses, among other attributes, places the wood and wood products industries as the third fastest growing manufacturing industry in the UK in The recovery in demand for wood products began towards the end of 2013 and has been maintained throughout 2014, as this Statistical Review will demonstrate. The 2014 ABS will surely show strong growth again for the forestry, wood and wood products industries in the UK. Doubts surrounding the sustainability of growth in following five years of low demand and no growth have proved unfounded, with the declaration in this Review that in 2014, the timber and panel products industries, the providers of raw materials and semi-finished products to wood products manufacturers, has grown by nearly 10% in volume. Many importing, producing and processing companies that comprise the timber and panel products markets have grown their businesses successfully over the last two years and, according to the ABS, at a faster rate than many other (and competitive) industries. Many of these businesses are members of the Timber Trade Federation (TTF) which has supported its Members in pursuit of their commercial, environmental and legal obligations through the most difficult trading conditions in modern times and now, over the last two years, in a growth environment. The TTF has successfully navigated a path of compliance for its Members, following the implementation in 2013 of the European Union Timber Regulation (EUTR), designed to limit or eradicate the placing of timber onto EU markets that may have originated from illegal-felling activity. The EUTR requires companies to conduct due diligence on their timber purchases, in order to evaluate and mitigate the risk of purchasing illegally-sourced products. The TTF s Responsible Purchasing Process (RPP), in operation since 2007, has developed and continues to evolve into a ready-made due diligence tool to help Members run their businesses in commercially and environmentally sound ways. As the industry moves forward into the second half of the second decade of the 21st Century, it is demonstrating a high degree of cohesion, high levels of sales growth and developing innovative products to serve the needs of an expanding customer-base. It is also ensuring that the all-important renewable and sustainable qualities inherent in wood products are communicated effectively to the growing numbers of specifiers and users that are finding the real value in using wood. This Statistical Review shows very positive trends for the timber industry in the UK. The growth prospects are substantial and we hope to reflect this trend and wider sector growth in our next review. David Lennan Chief Executive August

7 STATISTICS AT A GLANCE CONSUMPTION BY VOLUME AND VALUE Continued growth in the use of wood products in 2014 raised consumption to a level approaching 16 million m 3, the highest volume of timber and panels consumed in the UK for seven years. Rising from million m 3 in 2013 to million m 3 in 2014, this increase of 9.9% was the highest growth rate in wood consumption in the UK in the fourteen years of the current century. The development of wood consumption in more recent times, since 2007, is shown in Chart 1. Chart 1: UK Consumption of Wood Products , by Volume 000m3 m 3 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 17,992 14,455 12,966 14,122 13,694 13,486 14,447 15, Accompanying the increase in consumption by volume in 2014, the value of wood products consumed also rose. A 9.7% rise in the value of consumption raised the overall turnover of the timber and panel products measured in this Review to over 3.4 billion, a higher level of turnover for the first time since the pre-recessionary period in The 9.7% increase in the value of consumption was derived from the 9.9% rise in volume and a marginal fall in the average price received for all wood products of just 0.1% in With prices in 2014 at very similar levels as in 2013, the increase in the value of wood products was entirely driven by the increase in volume. The development of the overall value of wood products consumption is shown in Chart 2 below. Chart 2: UK Consumption of Wood Products , by Value Millions millions 4,000 3,500 3,000 2,500 2,000 1,500 1, ,434 3,324 3,130 3,030 3,026 2,896 2,698 2,

8 Statistics at a Glance CONSUMPTION BY VOLUME AND VALUE BY SOURCE OF SUPPLY The two sources of wood products consumed in the UK are imported goods and wood products produced in the UK. The volume of UK exports as well as re-exports (products that are imported and then re-exported) at around 0.6 million m 3 represents only a small part of the trade in wood products. Making allowance for exports, domestically produced consumption in 2014 totalled 6.35 million m 3, compared to 6.15 million m 3 in Making allowance for re-exports, imported consumption in 2014 amounted to 9.53 million m 3, compared to 8.31 million m 3 in As shown previously, volume consumption rose by 9.9% in 2014, which resulted from a 3.3% rise in domestically produced consumption (UK production of wood products less exports) and an increase of 14.8% in imported consumption (imports less re-exports). As the UK economy improved throughout 2014, the demand for wood products increased, especially from the construction industry, enabling UK importers and merchants to buy with increasing confidence. The differential growth rates of imported and domestically produced wood products had the effect of raising the market share of imports as seen in Chart 3 below. Chart 3: Share of Imported and UK Produced Consumption , by Volume 100% 90% 80% 41.9% 44.6% 43.1% 42.5% 40.0% UK Produced Share 70% % Share 60% 50% % Share 40% 30% 20% 58.1% 55.4% 56.9% 57.5% 60.0% Imported Share 10% 0% The double-digit growth in imported consumption in 2014, and the lower rate of increase for domestically-produced consumption, generated a significant change in the share of supply of wood products. As will be seen later in this Review, a construction-led recovery increased the demand for imported wood products, especially softwoods. This stronger demand raised the share of imported consumption to 60% in 2014, the first time since the recession took hold in 2008 that this level had been achieved by imported wood products. As the volume share of supply changed in 2014, so too did the share of supply by value. 8

9 Statistics at a Glance Whilst published import data on values permits estimates of average import prices, there is less detailed data available for UK production. Consequently, estimates are based mostly upon trade comment and market conditions. In 2014, these estimates indicated that the overall value of domestically produced consumption increased by a modest amount, at a little over 1%, whilst the average increase in the value of imported consumption rose by 14.5%. These increases resulted in a value of imported consumption of 2.27 billion, compared to 1.98 billion in The estimated value of UK produced consumption in 2014 was 1.16 billion, compared to 1.15 billion in Of all wood products, softwood enjoys the highest level of consumption in the UK and there is regularly a substantial discount in the price of UK grown softwoods compared to imported, resulting in lower values and therefore a lower share of supply by value for UK softwood products. These differences help to explain the larger share of supply by value enjoyed by imported goods and with strong growth of imports in 2014, this share of supply rose strongly in 2014, to just over 66% of the total, as shown in Chart 4, below. Chart 4: Share of Imported and UK Produced Consumption , by Value 100% 80% 37.1% 39.6% 37.6% 36.6% 33.9% UK Produced Share 60% % Share 40% 20% 62.9% 60.4% 62.4% 63.4% 66.1% Imported Share 0% Despite losing share of supply, UK-produced consumption increased in value in 2014 by around 16 million, while imported consumption rose by nearly 290 million. It should be remembered however, that these totals comprise the many different types of company activity in the timber industry. Some companies may have experienced losses in the value of turnover, while others will have raised turnover with the changes being the net difference between all of the losses and all of the gains. In volume terms, imported consumption increased by around 1.22 million m 3 and domestically produced consumption increased by 0.2 million m 3. The year 2014 has therefore seen growth in both sources of supply of wood products, but much higher growth with imported goods. Part of the reason behind this differential performance is the much wider range of wood products imported than produced in the UK. 9

10 Statistics at a Glance A much greater variety of hardwood products are imported than produced in the UK and, with the large volumes of plywood consumed in the UK where there is no UK production, the potential for greater gains (and losses) for imported consumption is apparent and this has been clearly witnessed in These and other changes in the shares of imported and UK produced consumption are shown in Chart 5. Chart 5: Shares of Imported and UK Produced Consumption by Product, 2014 & 2013 UK Consumption 2014 by Volume, by Product and by Source Particleboard & OSB Fibreboard Imported Consumption 0% 20% 40% 60% 80% 100% 0% 0% 6% 37% 31% 50% 50% UK Produced Consumption 63% 69% 94% 100% 100% UK Consumption 2013 by Volume, by Product and by Source Particleboard & OSB Fibreboard Imported Consumption 0% 20% 40% 60% 80% 100% 0% 0% 7% 27% 40% 60% 47% 53% UK Produced Consumption 73% 93% 100% 100% As mentioned previously, higher housing and other construction output in 2014 has driven the demand for softwoods, especially imported construction qualities from Scandinavia and other European countries. This has resulted in the share of imported softwood, as a percentage of all softwood consumed in the UK, rising to around 63%, from 60% in The volume of all hardwoods consumed in the UK is less than a tenth of the volume of softwood consumption and within the total for just hardwood consumption, UK-produced hardwoods account for around a tenth of all hardwood consumption. Therefore, the size and variety available of imported hardwood products provides for a greater potential for growth than with UK produced hardwoods. This potential was realized in 2014 with the volume of imported hardwoods growing by around 21% and within this total, good growth in tropical hardwoods took place. With an already very high share of supply of hardwoods consumed in the UK, the share of imported consumption rose further to 94% of all hardwood consumption. Strong growth in particleboard and OSB imports in 2014 of approximately 25% enabled the imported share of consumption for these products to rise in 2014, to 31% of the total of all particleboard and OSB consumed in the UK in Unlike softwood and hardwood consumption, the majority of these products consumed in the UK are produced in the UK. In recent times, a strong UK production sector has also held a larger share of UK consumption of products than imports. However, good growth of imports in 2014 of around 16% saw an equally balanced share of supply of with imported and domestically produced consumption, each holding a share of around 50%. These movements in volume, but particularly the rise in imported goods, has resulted in the overall changes in the share of supply in 2014, as shown previously in Chart 3, where the share of imported consumption by volume increased by two and a half percentage points in

11 SOURCE OF SUPPLY Country and World Region Europe continues to dominate supply of timber and panel products to the UK, with higher growth than any other supplying region in The volume consumed from this region increased to over 8 million m 3. CONSUMPTION BY VOLUME Mainland European and UK-produced timber and panel products dominate the supply chain in the UK, accounting for over 91% of all supply, as shown in Chart 6 below and Table 1. Chart 6: Consumption of Timber & Panel Products in the UK 2014, by Volume, by World Region millions Millions m m Europe UK Asia Central & South America North America Africa Oceania All regions of the world increased in volumes of timber and panel products supplied to the UK in 2014, but the faster rate of growth from European countries generated a strong rise in the share of supply from Europe, rising to just over 51% of the total of all supply. The share held by other regions fell as a consequence despite higher actual volumes. The 40% share of supply held by UK-produced timber and panel products is shown alongside the shares from each of the other regions of the world in Table 1 below. Table 1: Share of Consumption by Volume by Source % Volume Europe 48.6% 51.2% UK 42.5% 40.0% Asia 5.3% 5.0% Central & South America 2.0% 2.1% North America 1.4% 1.3% Africa 0.4% 0.4% 11

12 Source of Supply Country and World Region The growth in the share of supply held by Europe was a consequence of good growth in all product groups, with the exception of plywood. All other supplying regions of the world experienced reductions in the share of consumption, except Central and South America, despite as mentioned above, each of these regions increasing the volumes supplied. The falls in share were simply a function of lower rates of growth compared to Europe. The share of supply from Central and South America increased marginally in 2014 because of higher volumes of softwood plywood supplied from Brazil and Chile. The share of supply from North America fell, albeit marginally, in 2014 despite good growth of hardwoods from the USA, but at a rate that was insufficient to grow share of supply. The changes in share of supply shown in Table 1 are further explained by viewing the percentage rate of change of volume imported by the UK from the various regions of the world. These percentage changes in volume by supplying region between 2014 and 2013 are shown in Chart 7. Chart 7: Percentage Change in Volume Supplied 2014/2013, by World Region 18% 16% 14% 15.7% 13.8% 12% 10% 10.7% 9.2% % Change 8% 6% 4% 2% 3.4% 3.3% 0% Europe Central & South America Africa North America Asia UK The overall growth in volume consumption in 2014 was around 10%, with Europe, and Central and South America, achieving growth rates higher than the average. The share of supply for these two regions increased accordingly, as shown in Table 1. The share of supply from Africa remained much the same as in 2013 with growth rates, as shown in Chart 7, roughly the same as the overall average. The shares of supply for North America, Asia and the UK fell, as shown in Table 1, despite each region achieving positive rates of growth, as shown in Chart

13 Source of Supply Country and World Region The complete breakdown of volumes supplied to the UK from the main supplying regions of the world by product is shown in Charts 8 to 11 below. Chart 8: Change in Volume from UK Produced Consumption 2014/ m3 000 m Particleboard/OSB 43-7 The main feature of the change in volume of UK-produced consumption was the increase of 137,000 m 3 in softwood usage, which represented a growth of nearly 4%. Chart 9: Change in Volume from North America 2014/ m3 000 m Particleboard/OSB 1-1 The 14,000 m 3 increase in supply of hardwood from North America, as noted earlier, was less than the gains in volume by a group of European countries which included France, Germany, Estonia and Poland. 13

14 Source of Supply Country and World Region Chart 10: Change in Volume from Asia 2014/ m m Particleboard/OSB Fibreboard -0.4 Mixed fortunes beset plywood suppliers from Asia. While plywood supplied from China increased by around 4% from an already high starting point, falls in volume were experienced by Malaysia, thereby negating some of the rises from China. Although the net effect was an increase in plywood supplied, growth in volume was lower than the supply of other products from other supplying regions. As reported earlier, the growth in supply from Europe has been driven by higher volumes of most products, but as shown below, in terms of actual volume, growth from Europe has been dominated by the increase in softwood volumes Chart 11: Change in Volume from Europe 2014/ m Particleboard/OSB Fibreboard -15 These higher softwood volumes have arrived in the UK by virtue of increases in shipments from all of the leading countries of supply: Sweden, Latvia, Finland, the Republic of Ireland, Germany and Russia. Growth in the supply of particleboards from European suppliers was led, in 2014, by strong growth in volume from Germany, France and Portugal. 14

15 Source of Supply Country and World Region CONSUMPTION BY VALUE The size and differences in the order of magnitude of supplying regions by value to the UK is very similar to the grouping by volume, shown in Chart 6. The complete view of supply by value is shown in Chart 12. It should be noted that the values of UKproduced products are estimates, as no official source of UK values or price levels exists. Chart 12: Consumption of Timber & Panel Products in the UK 2014, by Value, by World Region 2,000 1,800 1,805 1,600 1,400 1,200 1,163 millions 1, Europe UK Asia Central & South America North America Africa Middle East Europe remains the single largest source of supply of UK consumption, valued at 1.81 billion in 2014, compared to 1.54 billion in The estimated value of UK-produced consumption in 2014 was 1.16 billion, a small increase over the 2013 value of 1.15 billion. These and other changes in the value of timber and panels consumed in the UK by world region, converted to a percentage of the value of goods supplied, are shown in Table 2. Table 2: Share of Consumption by Value by Source % Value Europe 49.3% 52.6% UK 36.6% 33.9% Asia 7.4% 6.7% North America 3.3% 3.5% Central & South America 2.4% 2.3% Africa 1.0% 1.0% 15

16 Source of Supply Country and World Region The increase in the share of the value of timber and panel products imported from Europe has been driven mostly by the increases in volume, as previously reported. The rise of supply from Europe, to approaching 53% of the total value, shown in Table 2 was mostly driven by increases in volume, but also assisted by a small increase in the average price of European imports. The only other region to experience an increase in the share of supply by value was North America where good growth by volume of hardwoods from the USA was supported by price increases which averaged 7% in It should be noted that increases in average price can be affected by changes in product mix, where different volumes of higher or lower priced products can have a significant impact on the average price of the total basket of goods. Falls in the value share of supply experienced by countries from Asia, and Central and South America, are mainly attributable to lower priced hardwood plywood from China and Malaysia, and similar price reductions in the supply of softwood plywood from Brazil and Chile. As reported earlier, softwood plywood volume increases in 2014 were enjoyed by Brazil and Chile, but the combination of price reductions and lower than average increases in volume from Central and South America compared to other regions, conspired to deliver losses in the share of supply by value. Moderate increases in the volume supplied by UK producers subject to a mix of price rises for some products and price reductions for others - culminated in a moderate average increase in the value of the basket of UK produced wood products which compared to better performances from other supplying regions, resulted in a fall in the share of supply by value of domestically produced goods in 2014, as shown in Table 2. The changes in the values of consumption shown in Chart 12 for 2014, compared to 2013 by region, are shown in percentage terms in Chart 13 below. Chart 13: Percentage Change in Value 2014/2013, by World Region 20% 16% 17.3% 14.8% 12.5% 12% 8% 8.2% 7.6% % Change 4% 0% -4% -8% 1.8% -0.7% -12% Europe North America Africa Central & South America Middle East UK Asia Overall, supplying regions of the world received better value for their goods in 2014 with the average increase in value for all consumption previously reported at 9.7%. Only Asia experienced a fall in the value of its exports to the UK. This decline, of less than 1%, was due to the downward pressures on plywood prices from the Far East. 16

17 UK IMPORTS Without exception, all timber and panel products imports were higher by volume in 2014 with, as in 2013, particleboard and OSB imports achieving the highest growth rate, at 24%. The volume of UK timber and panel imports increased once again in 2014, to a total of 9.66 million m 3, up from 8.43 million m 3 in 2013, an increase of approximately 15%. Chart 14: UK Imports of Timber & Panel Products 2014, by Volume 000m3 0 2,000 4,000 6,000 5, m ,399 Particleboard/OSB Fibreboard 187 Imported softwood volume rose to 5.93 million m 3, from 5.08 million m 3 in 2013, an increase of 847,000 m 3 or nearly 17%. imports increased by around 90,000 m 3 in 2014, a rise of 22% to 496,000 m 3. Imports of all panel products rose in 2014 by 10%, with particleboard and OSB imports the fastest growing panel products rising by around 24%. The relative rise and fall of all imported timber and panel products in 2014 compared to 2013 are shown in Chart 15 below. Chart 15: Percentage Volume Change in Timber & Panel Products Imports 2014/ % -5% 5% 15% 25% 35% % Change 16.7% 22.1% 1.8% Particleboard/OSB 16.0% 24.1% Fibreboard -5.2% 17

18 UK Imports The overall increase in softwood imports of 16.7% was driven by the top six softwood exporting countries to the UK: Sweden with growth of 13%; Latvia with growth of 21%; Finland with growth of 15%; the Republic of Ireland with growth of 9%; Germany with growth of 31% and Russia with growth of 23%, accounted for around 92% of the UK s softwood imports. The much smaller volumes of imported hardwood (compared to softwood) tend to exhibit greater fluctuations in volume and the year 2014 was no exception. Good growth was achieved by the leading country of export to the UK, the USA, up by around 15%. In contrast, the second largest exporting country to the UK in 2014, the Cameroon, shipped less volume in 2014, down by 2% over France achieved a 12% growth, but after a strong 2013 UK imports from Italy fell in 2014 by about 4%. Imports from Germany were a little higher in 2014, but the highest percentage increases in volumes came from Estonia and the Republic of Ireland. Estonia increased its supply to the UK by approaching 50% and the Republic of Ireland more than doubled shipments to the UK in 2014 albeit from a relatively low base. The combined totals of hardwood plywood and softwood plywood imports in 2014 were a little less than 2% higher than in As in 2013, hardwood plywood imports grew only very slightly, less than one half of one percent. At less than half the volume of hardwood plywood, softwood plywood imports in 2014 were higher by nearly 5%. As with the supply of sawn hardwoods, hardwood plywood exporting countries experienced mixed fortune in Of the leading countries, only China and Russia exported more volume to the UK: a 4% increase from China and a 5% uplift from Russia. In contrast, volume from Malaysia was sharply lower, down by 12% and also from Finland, down by 17%. It should be noted that supply from Finland is considered to be understated and this volume is subject to a separate review. Brazil increased its position as the leading softwood plywood supplying country in 2014, increasing volume by 10% and thereby raising its share of UK softwood plywood imports to approaching 50%. Volume from Chile increased sharply in 2014, up by around 60% as Chile claimed 7% of the market in Particleboard and OSB imports experienced another year of strong growth with France providing the UK with around 40% more particleboard than in 2013, but good growth was also achieved by Portugal, Belgium and Spain. Whilst the Republic of Ireland maintains a dominant position in the supply of OSB imports to the UK, strong growth was achieved in 2014 by Latvia and Lithuania. imports were 16% higher in 2014, with all the leading countries of supply increasing volume shipped to the UK. The Republic of Ireland exported the greatest volume, holding the position as the UK s leading trading partner in. Imports of from Ireland increased in 2014 by around 22%. Good growth was also achieved by the other leading countries: Belgium, Germany, Spain and Poland. 18

19 UK EXPORTS UK exports of timber and panel products fell by 3% in 2014, to a total of 576,000 m 3. Chart 16: UK Exports & Re-exports of Timber & Panel Products 2014, by Volume m Particleboard/OSB Fibreboard 16 Despite the overall fall in volume of UK exports in 2014, more softwood was exported than in This was in large part due to an improvement in the economy of the Republic of Ireland. Exports to the Republic rose by 10% and accounted for 87% of UK softwood exports. Exports of all other timber and panel products from the UK were lower in 2014, with the exception of plywood re-exports. Chart 17 below describes the changes in percentage terms of UK exports by product. Chart 17: Percentage Volume Change in Timber & Panel Products Exports 2014/ % -20% 0% 20% 40% % Change d 7.7% d -4.8% d 24.2% Particleboard/OSB B -5.0% F -24.1% Fibreboard d -1.8% Export volumes are relatively small in comparison to import volumes for most products, and even small changes in volume can generate high percentage changes, which is evident from the rise and fall in volume shown in Chart 17 above. exports have been on a generally downward path for many years and this decline accelerated during the most recent recession. However, the last two years have seen softwood exports rise once more from its nadir in 2012 of around 115,000 m

20 UK Exports exports were approximately 5% lower in 2014 with lower volumes shipped to India, the Falklands and Gibraltar. However, despite the overall fall, around 9% more volume was exported to the Republic of Ireland. Particleboard and OSB exports were lower in 2014 with a little less volume shipped to the Republic of Ireland, but higher volumes despatched to Germany and the USA. Exports of OSB to Belgium and Sweden were weaker in exports were significantly lower in Less volume, by over 20%, was shipped to the Republic of Ireland. Around 30% less was shipped to Belgium and exports to the Netherlands were 40% lower. The only destination that received more among the leading countries importing from the UK was Poland. Europe continues to be the UK s largest timber and panel products trading partner and in 2014 accounted for around 95% of all timber and panel exports, a very similar level to The complete breakdown of UK exports by world region is shown in Chart 18. Chart 18: Exports of Timber & Panel Products from the UK 2014, by Volume, to World Region m 3 000m3 m Europe Asia Middle East North America Oceania Central & South America As previously mentioned, changes in very small volumes tend to create very large percentage changes, and Chart 19 below shows this variability in the changes in exports by region in 2014 over Africa Chart 19: Percentage Change in UK Export Volume 2014/2013, by World Region 60% 55% 50% 45% % Change 40% 30% 20% 10% 0% -10% -20% -30% -40% -4% 22% Europe Asia Middle East -31% -29% Central & South America North America Oceania As seen in Chart 18, volumes exported to non-european destinations are very small and, as described, small changes can bring about large percentage fluctuations as demonstrated by the approximate 2,000 m 3 increase in exports to Asia in 2014, which generated a 22% rise. The overall scale of UK exports is of course driven by performance in Europe. 20

21 UK PRODUCTION In 2014, as in 2013, and Particleboard production increased, while less and was produced. Chart 20: UK Production of Timber & Panel Products 2014, by Volume - 1,000 2,000 3,000 4,000 3, m 3-45 Particleboard/OSB 2, Fibreboard - UK production of solid wood and panels amounted to 6.79 million m 3 in 2014, a near 3% increase over the 6.61 million m 3 in This total for 2014 surpasses the previous high point of UK production of 6.67 million m 3 reached in the pre-recessionary year of UK softwood production increased once more in 2014, rising to 3.67 million m 3 from 3.54 million m 3 in UK softwood production has increased every year in this century, bar the recessionary year of UK hardwood production is a very limited activity and has remained at similar levels for many years. Particleboard and OSB production in the UK increased in 2014 from 2.28 million m 3 in 2013, to 2.32 million m 3. Production of fell slightly, down from 0.76 million m 3 in 2013, to 0.75 million m 3 in Chart 21: Percentage Volume Change in Timber & Panel Products Production 2014/ % -5% 0% 5% 10% % Change 3.9% -2.2% Particleboard/OSB 1.9% -0.9% This section of the Review is concerned solely with UK production. The volumes of UK produced timber and panel products that are consumed in the UK are, in broad terms, derived from subtracting exports from production. Hence, once exports and re-exports are deducted from UK production (and imports where relevant), the volumes consumed in the UK can be calculated. The totals for UK produced consumption and imported consumption are reviewed in the following section. 21

22 UK CONSUMPTION OF TIMBER AND PANEL PRODUCTS A 10% rise in UK timber and panel products consumption takes total consumption in 2014 to nearly 16 million m 3. BY VOLUME Chart 22: UK Consumption of Timber & Panel Products 2014, by Volume 000m ,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,00010,00011, m 3 9, ,328 Particleboard/OSB 3,081 1,322 Fibreboard 171 The total of UK-produced and imported consumption in 2014 moved higher to million m 3, compared to million m 3 in Within these totals, softwood remains the single largest wood product consumed in The volume of 9.45 million m 3 was 11.5% higher than the 8.47 million m 3 consumed in The changes in consumption for all products are shown in Chart 23 below. Chart 23: Percentage Volume Change in Timber & Panel Products Consumption, 2014/2013 % Change -10% -5% 0% 5% 10% 15% 20% 25% % Change 11.5% 20.7% 0.9% Particleboard/OSB 8.6% 9.6% Fibreboard -5.5% 22

23 UK Consumption of Timber and Panel Products The 11.5% rise in softwood consumption in the UK was generated by a 17% increase in imported consumption and a 4% rise in UK produced consumption, in round terms. consumption rose by nearly 21% in 2014, entirely driven by increases in the volume of imports. Imported consumption increased by just over 22%, while domestically-produced hardwood consumption fell by a little under 1%. As previously reported, all plywood and fibreboard consumed in the UK is imported. A very small volume of plywood is re-exported, therefore imports in 2014 less re-exports of both hardwood and softwood plywood resulted in an increase in consumption of around 1%. The approximate 9% increase in particleboard and OSB consumption was generated from a strong increase in imported particleboard consumption, higher by 25% and a 3% increase in UK-produced particleboard contributed to this overall rise. As shown earlier in this Review, the volume of UK-produced consumption of particleboards is typically more than twice the volume of imported particleboard. Consumption of also rose in 2014, higher by nearly 10%. Once again, imported consumption increased in 2014 at a much faster rate than UK produced, rising by around 17%, compared to a 3% increase in domestically produced. The values of imported and UK-produced consumption in 2014 are shown in Chart 24 below. BY VALUE Chart 24: UK Consumption of Timber & Panel Products 2014, by Value millions Particleboard/OSB Fibreboard ,000 1,500 2,000 1, millions The value of all timber and panel products consumed in the UK in 2014 rose by 9.7% to 3.43 billion, from 3.13 billion in The value of softwood consumption rose by over 232 million; hardwood consumption increased by nearly 36 million; the value of plywood consumption fell by around 13 million; particleboard and OSB consumption rose by 26 million and the value of consumption was higher by around 7 million, with the value of other fibreboard consumption around 14 million higher. 23

24 UK Consumption of Timber and Panel Products The percentage changes by value for individual products are shown in Chart 25 below. Chart 25: Percentage Value Change in Timber & Panel Products Consumption 2014/2013 % Change -10% 0% 10% 20% % Change 16.0% 14.3% -3.1% Particleboard/OSB 2.0% 4.6% Fibreboard 20.5% The increase in the total value of consumption in 2014 to 3.43 billion, surpassed the pre-recessionary total of 3.32 billion in From 2007 to 2014, the value of imported consumption has fallen from 2.32 billion in 2007 to 2.27 billion in 2014, a reduction of around 2%. Meanwhile, the value of UK produced consumption has risen from just 1 billion in 2007 to 1.16 billion in 2014, a rise of 16%. SHARE OF CONSUMPTION BY VALUE AND VOLUME BY PRODUCT Chart 26: Share of UK Consumption 2014, by Volume Particleboard/ OSB 19.4% 8.3% Fibreboard 1.1% 8.4% 59.5% 3.3% The changes in the share of consumption by product (product mix) varies little from year-to-year, but the strong growth in imports in 2014 has provided a slightly more dynamic set of changes in product mix. The share, by volume of softwood consumption in 2014 rose to 59.5%, from 58.8% in

25 UK Consumption of Timber and Panel Products s accounted for 3.3% of consumption in 2014, up from 2.9% in 2013, reflecting the 22% increase in hardwood import volume in accounted for 9.1% of consumption by volume in 2013, but lower growth than other products has resulted in a drop in share to 8.4% in The biggest movement in terms of share of consumption over the last three years has been in the consumption of particleboard and OSB. In 2012, the share for these two products combined was 18.5% of the total of consumption for that year, rising to 19.6% in The share in 2014 has been maintained at a similar level, at 19.4%, as shown in Chart 26. The share of consumption held by fibreboards, other than, fell slightly in 2014 to 1.1% of the total from 1.3% in 2013, while consumption of is at the same level as in 2013, 8.3% of the total. Different timber and panel products command different prices, with some tropical hardwoods much more expensive than sawn softwoods and other products. Therefore, the share of consumption by value for the main timber and panel products is somewhat different to the share of consumption by volume. The share of each product by value of consumption is shown in Chart 27. Chart 27: Share of UK Consumption 2014, by Value Particleboard/ d/osb 17.5% 11.0% Fibreboard 2.5% 49.0% 11.6% 8.4% accounted for 3.3% of the volume of all timber and panel products consumed in 2014, but over 8% by value. As previously mentioned, higher quality grades and especially tropical hardwoods tend to be of a higher value than many other timber and panel products. These higher quality and often higher priced hardwoods are used for a diverse set of applications, include flooring, furniture making, the manufacture of durable pallets and specialist marine defences. Similarly, temperate and tropical hardwood plywoods tend to command a higher price which is reflected in the share of value consumption for plywoods in Chart 27 of nearly 12%, compared to just over 8% share by volume shown in Chart 26. The generally lower values of softwoods is reflected in the share by value of 49%, compared to the near 60% share by volume. Generally, panel products tend to be more expensive than softwoods, therefore the shares by value for and fibreboard are higher than the shares of total consumption by volume. 25

26 WOOD - Among the Leading UK Industries The UK economy grew well in 2014 as measured by Gross Domestic Product (GDP) - the aggregate value of all economic activity in the UK. Growth of 2.7% was achieved; the second successive year of recovery from the deep and long recession that started in As seen in this Review, growth of timber and panel products was also realised for the second consecutive year. Growth in 2014 was generally stronger than in 2013 with overall volume higher by around 10%, an improvement of the 7% growth in This strong growth of the forestry, wood and wood products industries over the last two years has provided positive proof that after five years of low demand and little growth, recovery has been established and the promise of further growth is very evident. The Statistical Review has shown over many years the importance of the forestry, wood and wood products industries in the UK economy and especially within the manufacturing sector. The turnover of forestry, wood and wood products companies has regularly placed the industry in the top half of the leading manufacturing industries and sub-sectors in the UK. In 2013, the latest year for which UK manufacturing industries data is available, the position of the wood and wood products industries has improved further, following a 15% increase in total sales by value. Excluding forestry and logging (treating this as an extraction industry, rather than manufacturing) the wood and wood products industries alone grew by 13% in 2013, making this industry the third fastest growing in the UK manufacturing sector. Table 3 reveals the growth rates by value of the leading manufacturing industries in the UK, as provided through the Annual Business Survey from the Office for National Statistics (ONS). The ONS data, published in June 2015, is for 2013 and is the latest available. It should be noted, when viewing this Table that the unit of measure is value, which in some industries will differ from performance by volume. It should also be noted that the data in the Table remains provisional at this time, until ONS releases firm data later in the year. Consequently, some data will change. 26

27 Wood - Among the Leading UK Industries Table 3: Growth of UK Manufacturing % Change 2013/2012 Quarrying of Stone, Sand & Clay 4,241 2,741 2,936 3,608 3,565 5,615 58% Toys & Games % Wood Products 7,817 6,498 6,693 6,806 6,752 7,624 13% Motor Vehicles 50,553 38,556 46,500 54,375 55,640 61,865 11% Roads & Railways 4,927 4,658 4,711 5,490 5,576 6,146 10% Transport Equipment 23,275 26,003 26,819 28,208 29,279 31,835 9% Construction of Buildings 71,939 58,666 55,509 55,161 57,118 61,003 7% Furniture 8,266 6,817 7,091 6,460 6,603 7,017 6% Computer, Electronics 21,343 17,802 20,033 19,592 18,520 19,541 6% Medical & Dental products 4,850 4,325 4,343 4,253 4,348 4,528 4% Leather Goods ,009 4% Paper & Paper Products 10,794 10,873 10,796 11,507 10,772 11,184 4% Mining & Quarrying 61,172 45,940 47,785 53,951 49,907 51,623 3% Food 66,052 69,673 70,560 73,175 75,037 77,602 3% Chemicals & Chemical products 41,858 34,074 37,764 38,874 30,983 31,990 3% Work Wear % Plastic Products 18,065 16,888 16,198 18,394 18,007 18,192 1% Fabricated Metal Products 34,266 28,880 30,335 31,745 33,133 33,275 0% Textiles 5,628 5,047 5,304 5,473 5,289 5,311 0% Basic Metals 21,337 15,986 17,964 19,661 17,502 17,467-0% Rubber Products 3,807 3,176 3,591 3,788 3,790 3,728-2% Electrical Equipment 13,467 13,086 12,824 14,016 14,582 14,228-2% Pharmacueticals 15,402 16,071 18,716 17,248 15,857 15,437-3% Machinery & Equipment 36,932 31,105 33,389 37,833 37,217 35,537-5% Non-metallic Mineral Products 14,333 13,241 14,164 14,248 13,551 12,759-6% Sports Goods % Coke & Petroleum 39,320 32,798 39,300 49,895 53,691 49,120-9% Jewellery ,170 1, % Concrete, cement and plaster 6,389 5,865 6,337 6,331 6,119 5,153-16% Musical Instruments % Brooms & Brushes % Total UK Manufacturing (NOT inc forestry) 589, , , , , ,091 3% Although sometimes not classified as a manufacturing industry, Construction of Buildings is included in the table above for comparison. 27

28 Wood - Among the Leading UK Industries Whilst placing the wood and wood products industries as one of the fastest growing manufacturing industries in 2013, its performance against similar and sometimes competing industries is presented in chart form, in Chart 28 below, The relative performance of selected industries to 2013 by turnover indexed from 2008 is shown below. Chart 28: Selected Industries Turnover, Indexed Plastic Products Wood Products Furniture 2008 = Cement, Lime & Articles of Concrete Construction of Buildings As shown in Chart 28, the growth in the value of wood products in 2013 is better than that of industries operating in similar market areas. According to the provisional data from the Annual Business Survey, the wood and wood products industries in 2013 were, at an indexed level of 97.5, close to achieving the same levels of turnover that were last realised before the recession. The value index of the wood and wood products industries in 2013 was significantly higher than that for the furniture industry, the cement and concrete industry and the wider construction industries. Care should be exercised in viewing the cement and concrete numbers above however, as the value index as provided by the Annual Business Survey is not consistent with other measures of performance in this industry. 28

29 Wood - Among the Leading UK Industries Returning to relative sizes of different manufacturing industries, Chart 29 below shows the leading industries turnovers for 2013 in descending order of magnitude. Chart 29: Turnover of Manufacturing Industries in the UK, 2013 Billions billions Food Motor Vehicles Consruction of Buildings Mining & Quarrying Coke & Petroleum Machinery & Equipment Fabricated Metal Products Chemicals & Chemical products Transport Equipment Computer, Electronics Plastic Products Basic Metals Pharmacueticals Electrical Equipment Non-metallic Mineral Products Paper & Paper Products Wood Products Furniture Roads & Railways Quarrying of Stone, Sand & Clay Concrete, cement and plaster Medical & Dental products Rubber Products Forestry & Logging Leather Goods Jewellery Toys & Games Sports Goods Work Wear Brooms & Brushes Musical Instruments Forestry, wood and products of wood, whilst not the largest of manufacturing and processing industries in the UK is nevertheless of a substantial size. The provision of timber and panel products ready for use quantified in this Statistical Review has been valued in 2014 at over 3.3 billion. When these goods are sold onto the many processing, distribution and manufacturing activities that comprise the timber industry supply chain, the value added by the wood and wood products industries realise an industry turnover of around 7.6, as shown in Chart 29. These added value activities include timber frame manufacturing, the manufacture of flooring products, joinery, wooden containers (including pallets) and the manufacture of a multitude of other products made of wood. For the purposes of comparison, the estimated turnover from the forestry (extraction) sector, based upon the Annual Business Survey, when added to the bona fide manufacturing processes for wood products, raised the estimated total turnover of forestry and the wood-based products industry in 2013 to around 8.9 billion. 29

30 Wood - Among the Leading UK Industries The relative positions of the forestry and logging, and the wood and wood products industries with other manufacturing and processing in the UK for the year 2013 is shown in Table 4 below. Table 4: Turnover of UK Manufacturing Industries, 2013 billions % Change 2013/2012 Food % Motor Vehicles % Consruction of Buildings % Mining & Quarrying % Coke & Petroleum % Machinery & Equipment % Fabricated Metal Products % Chemicals & Chemical products % Transport Equipment % Computer, Electronics % Plastic Products % Basic Metals % Pharmacueticals % Electrical Equipment % Non-metallic Mineral Products % Paper & Paper Products % Wood Products % Furniture 7.0 6% Roads & Railways % Quarrying of Stone, Sand & Clay % Concrete, cement and plaster % Medical & Dental products 4.5 4% Rubber Products 3.7-2% Forestry & Logging % Leather Goods 1.0 4% Jewellery % Toys & Games % Sports Goods 0.5-6% Work Wear 0.2 2% Brooms & Brushes % Musical Instruments % Total UK Manufacturing (inc forestry) 587,034 3% In summary, the timber industry in the UK, as measured by turnover, grew strongly in 2013 and promises to do so again in 2014, once official manufacturing data from ONS is available for The size and growth performance of the wider timber industry compares favourably with many other industries, confirming the importance of the industry within the UK economy. As has been noted by an increasing number of observers outside the industry, the timber industry in the UK is much larger than many may have imagined. 30