Business rates among cost concerns
The British Woodworking Federation’s Joinery State of Trade Survey has indicated that the benefits of increased joinery sales are being balanced out by inflationary pressures such as wages and the impact of exchange rates on raw material costs.
With business rates changes set to hit many joinery companies from April, almost one third of respondents reported that they are expecting an increase of over 5%.
BWF policy and communications executive Matt Mahony said: “The high street may have been a major focus of the ‘business rates revolt’, but further cost rises for our industry are unpalatable.
“There are undoubtedly companies that will benefit from the changes, but on balance our industry looks to be getting a bad deal from the revaluations – this is especially galling as we have long campaigned for low energy manufacturers to be incentivised and it makes no sense to include plant and machinery in rateable value when trying to drive investment and job creation.”
The rest of the survey was more positive. Sales volumes had increased for 26% on balance and were anticipated to grow again for the first quarter of 2017), but at a lower growth rate than before.
Further depreciations in the Sterling also raised the cost of imported materials, meaning that raw materials continue to be the main driver of input price inflation, with wages and salaries also having a big impact on costs.
“Realistically it’s not a bad picture at this point of time, although uncertainty over the impact of Brexit continues to linger in the background as it has been for the last couple of quarters,” Matt said. “You can see the impact on costs, but thankfully this doesn’t seem to have hit the investment intentions of joinery businesses or their plans to take on more staff.”