Wood Products Prices in The UK
1-15 March  2004

【March  2004】

An Update from the UK 

A Changing Market 

The furniture and furnishings market in the United Kingdom is undergoing a significant transformation, and this change is most apparent in terms of changed consumers' attitudes. At the moment this structural transformation seems to be only partly registered by the official statistics regarding furniture consumption.  

When looking at the number of kitchens sets sold in the UK in 2003 the market appears to be stagnant (although it was  better than in Italy or France), but an analysis of the value of kitchen furniture sales reveals an increase by as much as 8% in 2003 compared to the previous year.

 European analysts from CSIL attribute the increase in sales value to mainly growth in sales of fitted kitchens compared to knock-down and DIY types of kitchen furniture.A similar trend could be seen in the sales of bathroom furniture and fittings.

In recent years there has been a huge increase in exhibition space dedicated to bathroom furniture and this was noticeable at the recent Furniture Show in Birmingham where there was lively interest in the kitchen and bathroom furnishings of modern and contemporary style.  This is quite different compared to up to four or five years ago.

 UK attracts Investment  

According to the latest edition of the LaSalle European Capital Markets Bulletin, in 2003 the UK attracted around half of the total offshore investments made in Europe.

 Although last year total European capital assets reportedly fell by around 8%, the UK appeared to be one of the preferred countries for investment followed by Scandinavian countries especially Sweden, Denmark and Finland.

Company News  

More Consolidation  

The trend towards concentration of production in the UK kitchen furniture sector continues. The recent acquisition of the UK kitchen company Gower Group Ltd. by the Swedish group Nobia is further proof of this  

Gower is said to employ some 500 peope at its plant in West Yorkshire and the company is UK's leading supplier of flat-pack kitchens and accounts for 6% of the domestic kitchen market.  Nobia is already operating in the UK market through the Magnet chain. Nobia is Europe's leading kitchen manufacturer. The main competitor of the Nobia-Magnet group on the British market is the MFI group (Hygena kitchens is part of it). These two leading groups integrate both production and distribution and together they are in the lead regarding the concentration of production.

 Online Catalogue from Next

Next is said to probably have the largest catalogue of furniture and home goods for sale via the Internet. The British market shows a very high degree of acceptance of online furniture sales.

John Lewis  

The British chain of retailing stores, John Lewis, has  announced that it will diversify into childrens' furniture. The trade press is reporting that all John Lewis department stores will have dedicated shop-in-shops, where some 150 lines of goods and furniture for children will be sold.

News from the UK

The UK 2004 budget will be delivered on the 17th March and ahead of this the traders are very wary of making any commitments. The Bank of England has kept interest rates steady for another month but again pressure is growing for an increase next month.

The UK stock market continues to yo-yo up and down but the overall trend is up. However the trade deficit continues to rise as the dollar remains weak. The deficit along with the budget shortfall of nearly Sterling 37 billion for the last 12 months indicates that all is not well in the economy and analysts say that the bullish comments from the government is not reflective of reality.

The mainstay of the economy continues to be the service sector with new business rising to its highest level since May 1997.

Timber prices are firm across the board in terms of FOB but exchange rates are holding importers prices down.  The "decking season" is just starting as spring arrives in the UK but hardwood suppliers are missing out due to shortages of Keruing and Iroko, softwoods are said to have about 95% of this market.

Log Prices in the UK 

UK Sawnwood Prices  

Plywood and MDF in the UK  

 For more information on the trends in the UK market please see www.ttjonline.com and www.hardwoodmarkets.com

Source:ITTO