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The UK hardwood market this year is considerably slower than the last two years, now that the COVID home improvement boom is well and truly over. British consumers are suffering from a \u201changover\u201d with annual inflation still close to 8% and the bank base rate having been pushed up to 4.5% following 12 consecutive increases since December 2021.<\/span><\/p>\n High stocks of hardwood products were built up in the first half of last year when prices were higher and have only been selling slowly, often at a loss to maintain cash flow.<\/p>\n Nevertheless, there are emerging signs of market stabilisation, with some gaps beginning to open in UK stocks and some more positive economic signals. The UK consumer confidence index, while still negative, has risen from record lows recorded at the end of last year.<\/p>\n Inflation is now widely forecast to fall sharply, for example PwC expect it to level out around 3% to 4% before the end of this year.<\/p>\n The S&P Global\/CIPS UK Construction Purchasing Managers\u2019 Index (PMI) registered 51.6 in May, up from 51.1 in April and above the neutral 50.0 mark for the fourth successive month. Although indicative of only modest growth, the latest reading pointed to \u201cthe strongest upturn in total construction activity since February.\u201d Commercial building (index at 54.2) was the best-performing segment, with output rising at a \u201crobust and accelerated pace.\u201d<\/p>\n However, worries about the impact of higher interest rates and subdued market conditions continued to dampen housing activity in May. Work on residential building projects decreased for the sixth month running and at the steepest pace since May 2020. Aside from the pandemic related downturn, the latest reading for this category of construction activity (42.7) was reported by S&P Global\/CIPS as being \u201cthe lowest for just over 14 years.\u201d<\/p>\n At a macro-economic level, in May the IMF updated their forecast for UK GDP growth this year to 0.4%, whereas in April it forecast the economy would contract by 0.3% in 2023. According to IMF, growth would be helped by \"resilient demand\", easing concerns about Brexit, and falling energy prices.<\/p>\n The IMF said faster-than-usual pay growth and global supply chains returning to normal after the pandemic had also contributed to its growth upgrade. However, the IMF also noted that the outlook for UK growth \"remains subdued\" and forecast the economy will grow by only 1% in 2024, rising to 2% in 2025 and 2026.<\/p>","protected":false},"excerpt":{"rendered":" The UK hardwood market this year is considerably slower than the last two years, now that the COVID home improvement boom is well and truly over. British consumers are suffering from a \u201changover\u201d with annual inflation still close to 8% … Continue reading