FORT February Newsletter - 2024

General Availability & Price Update

Our roundup of key indicators is shown below

Availability remains good and we are not seeing any major inflationary pressures. National house building sales are still quite slow which means that many manufacturers need the general building market to take their products.

As usual, we’ve set out some key indicators below and, like the weather, we can’t control them but at least they help us all to see roughly what’s going on:

Weather & Climate - As you can see from this link, rainfall is around 150% of the average over the last 4 months and these are generally rainy times, so it’s no surprise to find that we’ve seen extensive flooding. The first half of February has been particularly bad.

Currency - The £ is still holding up well against the Euro but has weakened a little against the $ since early January. This is helping to shield us from some of the rises in oil prices (see below). The Swedish Krown is still relatively weak, but has strengthened since October 2023.This is relevant because a large amount of timber comes from Sweden.

Oil Prices - We’ve added this in, because it has such an impact on costs and as the issues in the Middle East develop this will need to be watched. The price is fairly steady, which indicates that shipping through the Suez Canal may be returning to more normal patterns.

Containers - We’ve watched these rates drop for many months and then they shot back up, almost doubling in January, but appear to be slackening. Some of that cost will be down to ‘realignment’ as containers are out of position, stuck on vessels taking the long route around the Cape. There will be an impact on price and availability for some products.

Steel Bar - Steel rebar prices appear to have come off their lows but are now settling at around $600/tonne.

Timber - We can see that the US lumber market has continued to harden, but is still at relatively low levels. The European market remains weak but underlying pressures are increasing and it seems hard to believe that prices will not increase during 2024.

Inflation - The high of around 13% is now down to 5.3% (end of December) but it seems to now be flatlining. Base lending rates remain at 5.25% but mortgage bonds are showing offers at around 4.5%; underlying pressures remain and lower rates are far from certain.