A 230-page report by MTW Research – based on 80% of the timber frame market – found construction of timber buildings is set to top 60,000 units with orders exceeding £700m in value in 2018.
Interestingly, timber housebuilding is gaining further share while commercial timber construction is experiencing more challenging trading conditions, though forecasts are positive for most key end-use sectors.
Speaking to Planning & Building Control Today, MTW’s director Mark Waddy said: “The Government’s home building fund is set to generate 150,000 new homes from SME housebuilders, with timber frame playing a very significant part in this growth.
“This initiative, coupled with a rapid rise in overall housebuilding has dampened housebuilders’ purchasing power, underpinning the timber frame market’s profitability to some extent.”
According to PBC Today: “The research indicates that timber will reach a critical mass in the next few years, with the technology increasingly being regarded as ‘mass-market’, rather than ‘the other option’. The market has experienced profit growth in 2018 with timber frame homes accounting for almost one-third of the home building market in the next few years according to MTW’s forecasts, despite some uncertainties in the housing market recently.
However the report also identifies a number of threats. For example, the risk of a slowdown in housebuilding growth impacting on profitability for the timber fame market. According to MTW, this would likely result in a growing number of mergers and acquisitions in the next few years. And therefore vertical integration with housebuilders and distributors – coupled with acquisitive share growth by timber frame suppliers – may become increasingly important in 2018 and 2019.
Discussing this with PBC Today, Waddy said: “The purchase of Scotframe by Saint Gobain in 2017 suggests that key players may increasingly seek to accelerate growth and protect margins through economies of scale and vertical integration in what may be an uncertain economy over the next few years.”
The report also reviews the public sector housebuilding market, of which timber frame usually accounts for a larger share of housebuilding. Since 1981 social housing has declined by 26%, and this lack of investment has impacted timber frame growth. However, if the government does address this in the future there is huge potential for growth.
Read the full article here.
The 2018 Timber Frame Market report is available for £595 at www.marketresearchreports.co.uk or by calling 08456 524324
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