Report points to healthy future for UK timber frame market

16 June 2016

The timber frame market is continuing to outpace the UK economy despite slowing slightly from recent double-digit growth, suggests a new report from MTW Research.

Based on data from 80% of the timber frame market, the research found that 2016 profitability continues to strengthen as demand rises from housebuilding and commercial construction. However, MTW notes that there is some evidence of likely deceleration in growth for timber frame sales in the second half of 2016, though “healthy trading patterns” are forecast for 2017 and beyond.

According to the 200 page report, rising volume demand for timber frame homes over the last few years has sustained optimism with increasing market opportunities at both lower and higher value ends of the market in 2016. This has underpinned the timber frame market with MTW reporting some 80% of timber frame suppliers having good or excellent credit ratings in 2016.

MTW’s research executive James Taylor said: “Sustained demand for new housing, coupled with advances in timber frame technologies are set to stimulate growth in the timber frame market in the medium to longer term.”

The report forecasts sales growth of more than 30% by 2020, underlining healthy opportunities and a promising future for the timber frame market.

The drive toward more energy efficient homes and buildings as seen in the last few years has been curtailed to some extent with the Government’s recent scrapping of the zero carbon home target. Although energy efficiency will remain a driver of demand for timber frame construction in 2016, MTW indicate that this is no longer the main focus for many timber frame suppliers.

Instead, larger house builders are more focused on offering greater flexibility and wider product choice, highlighting their ability to offer a range of tailored timber frame solutions to meet specific user requirements.

Cost and sustainability, lower waste, and greater thermal efficiencies amongst other issues continue to support the specification of timber frame, with the research finding that timber has continued to gain share of the UK construction market. MTW forecast that closed panels and the SIPS market are likely to gain further share over the open timber panel market in 2016, though open panel remains the primary choice for most housebuilders.

The research uncovered some 60% of timber frame suppliers now reporting growth, underlining optimism for the majority of the timber frame market. However, the company also point to a ‘two tier market’ in 2016 with some 20% of suppliers experiencing difficulties in terms of flat or declining sales, tightening margins and pressure on financial liquidity.

Nevertheless, the research identifies a number of key drivers and opportunities which should underpin growth in the timber frame construction market through to 2020.

The report highlights that housebuilding levels are some 31% higher than in 2010, with timber frame sales having risen faster than the overall housebuilding market. MTW’s report also reviews the MMC market (modern methods of construction), finding that sales in this sector are set to top £2bn for the first time in 2018, underpinning further optimism for new building technologies and materials in the future.