Manufacture of Wood and Wood Products
July 2007
Introduction
A long-established traditional sector, the wood processing industry is comprised of a wide range of product sectors. These include the primary sawing and processing of wood; the production of semi-finished wood products such as veneer sheets, particle-board/chipboard, fibreboard, plywood and impregnated wood; builders' carpentry and joinery components such as beams, trusses, doors, window frames, staircases, flooring, mouldings, etc together with the manufacture of wooden prefabricated buildings and components; wooden containers such as boxes, pallets, barrels, etc; various other miscellaneous wooden products (such as ornaments, step ladders, household utensils and picture frames but excluding furniture); and articles of cork, straw and plaiting materials. The main downstream sectors from which the demand for wood products is derived are the furniture sector and the construction sector.
Employment
Employing just 1,900 people in 2005, wood processing is a relatively small local industry accounting for only 1.9% of Lancashire's manufacturing workforce against a share of 2.6% in Great Britain at large. Whilst nearly a half of local employee jobs are based in the three Central Lancashire districts of Chorley, South Ribble and West Lancashire, the industry shows little obvious concentration across the sub-region and in no district does it make more than a minor contribution to employment opportunities. Male employees comprise about three-quarters of the industry's workforce and 90% of employee jobs are full-time (Table 1).
| Employment Status | Employees | |
| No. | % | |
| Male full-time workers | 1,400 | 71.8 |
| Male part-time workers | 100 | 4.2 |
| Female full-time workers | 300 | 17.5 |
| Female part-time workers | 100 | 6.5 |
| Male workers | 1,500 | 76.0 |
| Female workers | 500 | 24.0 |
| Full-time workers | 1,700 | 89.3 |
| Part-time workers | 200 | 10.7 |
| Total | 1,900 | 100.0 |
| Source ONS - Annual Business Inquiry, 2005 | ||
Much wood processing began as a craft activity and the family structure of many companies remains an important characteristic. It is dominated by small and medium sized enterprises and statistically the "average" company employs just 7 people. Fully 98% of the 270 firms within the local industry employ fewer than 50 people and these account for three-quarters of all the employee jobs. Among the larger firms represented locally are Europanel (UK) Ltd, Skelmersdale, who are leading independent manufactures of melamine faced chipboard and MDF; Prestoplan Ltd, Bamber Bridge, timber frame manufacturers; and RK Timber Engineering, Chorley, manufacturer and supplier of timber engineered products for the construction industry. Numerous other sizable companies are closely associated with the wood and wood products industry but as in the case of such firms as Palgave Brown (UK), a leading supplier of wood products, are classified as wholesalers whilst others such as chair manufacturer HJ Berry of Chipping or kitchen and bedroom manufacturer J&J Ormerod plc are listed under furniture manufacture.
Employment Trends
Never a large sector in the County, employment in Wood and Wood Products hovered between 2,500-3,000 over the early post-war period, peaking in the late 1960s at about 3,500. Employment opportunities dropped rapidly over the 1970s, probably due in some measure to the closure of a number of port-related timber businesses and activities. The 1980s was a period of general stability in contrast to the large job losses incurred by many other manufacturing industries. From its last peak in 1989, employment has fluctuated in line with the business cycle but with a general downward drift over the following decade. All sectors of activity experienced job reductions to some degree though the trend was most pronounced in the largest single sector, builders' carpentry and joinery. Over the past decade however, there has been some jobs recovery, reflected across most sub-sectors. Wood and wood products manufacturing is closely allied with the construction sector and it is probable that it has benefited greatly from the fashion swing towards, for example, wooden flooring, but more generally from the very large upswing in building activity that has taken place locally.
General Characteristics
Wood processing is a secondary industry that converts wood commodity (or 'forest') products into higher value wood products. With annual turnover in 2004 of about £153m (or just 1.1% of Lancashire's manufacturing total) and GVA of £63m the local industry is a relatively small one but comprises a range of products serving both industry and final consumers. In particular, it is an important supplier to the building and furniture industries and is therefore greatly influenced by the cyclical demand for wood products occasioned by these industries. It is also an important packaging product. It is highly dependent too on imports of both hardwood and softwood timbers (with more than two-thirds of total consumption by volume coming from overseas) and thus on world prices and currency fluctuations, though transport costs otherwise tend to limit such trade in wood and wood products. The industry has suffered from some degree of materials substitution, e.g. by plastics and metals but has sought to develop products in competition in the form of new types of fibre and laminated boards, etc, with enhanced structural or other characteristics as well as marketing strongly on the sustainability aspects of its product and sourcing from certified sustainable managed forests.
For long a craft industry, some sections of wood processing have been subject to rationalisation over the past decade and with new investment in semi-automation, more technical production equipment and off-site fabrication, general efficiency has increased and labour productivity has risen strongly. This is particularly the case for semi-finished wood products like chipboard, plywood and fibreboard. However, by the standards of manufacturing industry generally, much wood processing remains, in absolute terms, of fairly low capital intensity (with average annual net capital expenditure per head in the sub-region of about £2,700 or about a fifth lower than the manufacturing average) and something of a low productivity/low value added industry. Local gross value added per head at about £26,600 has improved greatly over recent years though still slightly lags that of the industry nationally and is well below the all-industry manufacturing average.
For further details, please contact:
Peter Kivell
Tel 01772 534157
Email Peter.Kivell@lancashire.gov.uk