TIMCON says there is "significant evidence" of a sustained increase in timber prices and shortages in supply for its sector. Since its last statement in August, the confederation says continued recovery in the construction industry and particularly strong growth in house building has put further upwards pressure on prices and the availability of wood. Stuart Hex, General Secretary of TIMCON said "The strengthening upturn and government financial incentives for buyers of new-build homes are returning confidence to the construction sector, with the indications that this trend will continue. This is having significant implications for the pallet and packaging sector. Competition and weak demand in recent years have kept prices of timber pallets and packaging at a low, even unsustainable level, for a significant period of time. We are now facing increasing timber prices, which as an industry we cannot absorb. The latest Marketkit/CIPS UK Manufacturing report from 1 October 2013, shows an increase in the price of timber, pallet timber and pallets. Meanwhile, the latest Poyry index for the price of pallet and packaging timber shows compound growth in the price of home-grown pallet timber for Q2 and 3 of almost 10%, and with a sharp acceleration in the rate of price increases in Q3. The prices of non-standard pallet timber sizes are increasing at a much higher rate than identified by the Poyry Index."
