Timber price index

Timber price index

Total (2027)

78 Index

Annualized Growth 2022-27

-4.5 %

Definition of Timber price index

This report analyses the timber prices in Great Britain, using the Softwood Sawlog Price Index (SSPI) - tracked by non-ministerial government department, the Forestry Commission - as a proxy. As stated by the Forestry Commission, which is an agency of the Department for Environment, Food and Rural Affairs (Defra), the SSPI is based on administrative data for sales of softwood sawlogs (i.e., roundwood with a top diameter of 14 cm or more) collated by Forestry England, Forestry and Land Scotland and Natural Resources Wales. The SSPI is calculated from data covering separate six-month periods to 30 September and 31 March, whereby data presented in this report represents the average of two separate six-month readings over a given financial year (i.e., April-March). The SSPI used for this report considers prices in real teams and has a base period in 2021 (i.e., six-month period to 30 September 2021 = 100.0 points).

In general, timber prices are affected by demand and supply conditions, in addition to fluctuations in the trade-weighted value of the pound. Timber is predominantly sought in the construction sector (e.g., as a structural material in dwellings); in large quantities for fencing and similar outdoor purposes (e.g., terrace decking and outdoor furniture); for indoor furnishings (e.g., cabinets); and for manufacturing pallets and packaging (e.g., wooden crates). Supply-side issues can be equally as disruptive and can cause a relatively high level of price volatility year-on-year. Production capacity, whereby the value chain extends from the process of felling - this is the commercial term for cutting down individual trees - storing and transporting raw materials, debarking logs, seasoning natural wood, and preparing timber for market use; the availability of timber resources and forest land; the quality of timber stock; and weather pattern can all influence the world supply of timber. Meanwhile, a significant proportion of timber and other wood products used in the domestic market are sourced from overseas suppliers, meaning competition from foreign timber supply markets can influence the UK market supply and price of timber.