Blog: The big 2021 wood price rise - Top tips for tradespeople
Itís a great time to be a tradesperson, with 13% growth expected in the construction industry and rising demand across a number of disciplines. As of May 2021, with the world starting to open up again, renovations, repairs and new builds are resuming. But, with such sudden demand, and a backlog of projects from 2020, this brings new challenges to navigate.
One of the most notable of these is the drastic timber price increase that has occurred so far in 2021. As a result of timber and lumber prices going up, tradespeople are seeing product availability issues, cost increases and longer lead times, to name a few issues. However, with the right approach and armed with the tips below, youíll be well positioned to beat these challenges and take advantage of the fantastic opportunities for new projects.
With this in mind, we will look at what this means for the industry, why wood prices have increased and how you can ensure you arenít out of pocket when pricing future work.
How are Checkatrade helping their members navigate the rise in wood prices?
Before we get into the reasons for this trend, itís important to consider the positives of this situation. Long delayed projects are now starting, interest in home renovations is booming and we are strong believers that our members are well positioned to capitalise on this growing demand.
At Checkatrade, weíve been helping our members navigate challenging market conditions for over 20 years, through education and connecting customers with trusted tradespeople. Thatís one of the reasons weíve prepared this fantastic guide on the cost of timber as well as the tips below, including information on how to revise your prices.
Whilst we donít have a crystal ball for how long the wood price rise will last, we do have lots of fantastic benefits that can help our members during this time.
- We have partnerships with many suppliers of materials, tools, insurance, vehicles, fuel and more, that can help you to achieve reduced prices and save money on other business essentials.
- Our flexible membership options - adapt a membership personal to you with the option of picking and choosing what categories you'd like to be displayed under, add postcodes, decide your radius and you can even be included in our printed directories.
- Our community is an amazing place to connect with other members, ask questions, and share answers. Here you'll find the latest updates and news from us, you can get involved in research groups sharing your ideas, feedback, and suggestions to help shape the future of Checkatrade. Why not get started by creating a new post here.
Why have wood prices increased?
Put simply, the timber price increase is down to two things, supply and demand.
- Supply: Limited timber production occurred during 2020, as a result of Covid-19 and even with production already at a 13 year high, there still isnít enough supply to go around to meet demand. For example, the UK gets 40% of its timber from Sweden, but much of this is being kept in the country for local projects. In addition, shipping and transport costs have risen, leading to lumber prices going up.
- Demand: We are in an incredible boom period for projects, with many large projects that were delayed until 2021 now beginning. Due to increased demand the market is prepared to pay higher prices. Thatís why most of the European supply is being used in the US (despite a 232% increase in prices!)
What are typical timber and lumber prices in 2021?
Prices are now at record highs in a number of countries, although the exact increase varies from country to country. In the UK, softwood lumber is 113% more expensive this year and C16 and C24 lumber is up 60-70%. Whilst suppliers are absorbing some of this cost, this isnít sustainable, so market prices have risen accordingly.
These prices are also continuing to rise month-on-month. In April 1st 2021, Jewson reported monthly rises of 10-18% for fencing, battens and plywood. These prices are expected to continue to rise.
What is the timber and lumber price forecast for 2021?
In a joint statement from the BMF and CPA they explained that ďTimber is a global commodity and there is an imbalance between global demand and supply that is not likely to be resolved in the near future. The UK must be prepared for higher prices to continue.Ē
So, should you stockpile wood in 2021 like the rush for toilet paper in 2020? Well, it depends. Weíre very much in unchartered territory here. No one knows how much prices will continue to rise, what the limit is, and when they will return to lower levels.
If you have an urgent job, then buying the timber today could be cheaper than buying it tomorrow, if trends continue. Also, if youíre a large construction company that will have no trouble using the materials, you could save a fortune by purchasing before the peak.
Think of it like buying stocks and shares Ė buy low, sell high. Or in this case buy materials before they go up in price and make sure you use them before they go down in price. Much like the stock market, itís impossible to know 100% for sure what will happen or to give a guaranteed 2021 lumber price forecast. But, current trends do indicate a continued rise in prices, at least in the short term.
How should I price jobs during the wood price rise?
In addition to timber and lumber, the cost of many other commodities has risen, including tiles, insulation, steel, paint, plaster and more. This means that accurately pricing a job is somewhat of a moving target, with prices changing monthly.
With this in mind, whatís the best way to price a job and not get caught out by the rise in the cost of wood? Well, here are some of our top tips:
- Educate your customers on why the cost of materials has risen. Itís important they understand that itís due to external factors and that you arenít charging them more to increase your own profits. You could send them the link to he recent Timber cost guide we've created
- Encourage customers to book jobs sooner rather than later, so they avoid other price rises.
- Separate out the costs for labour and materials when pricing. This will help you show how your part of the job remains reasonable and help them see that the material price is purely based on market rate.
- Donít be tempted to lower your labour prices to compensate and in order to make the end cost to the customer the same. Demand for projects is very high and youíd be doing yourself a disservice by undervaluing your part of the job.
- Indicate on the quote that material costs are subject to change or only valid for a certain number of days. This covers you against any future price rises.
- Provide an estimate rather than a formal quote and advise that materials will be charged directly to the customer. This covers you against fluctuations.
- Consider using alternate materials, such as PVC or composites. For example, try Trex decking instead of wood. This also gives you the chance to upsell them to more premium products.
How are things going for you and do you have any other advice or tips to add?
All my best,