Business rate rise feared – survey
February 2017

Business Rate Revaluation in England and Wales as well as wage inflation and the effect of weak Sterling on raw materials prices are highlighted as the main concerns in the latest State of the Trade Survey by the British Woodworking Federation.

A fifth of all those surveyed expected to rate to rise while almost a third (32%) expected an increase of 5% or more.

Policy & Communications Executive Matt Mahony said: “We were concerned to find that almost a third of respondents indicated an incoming business rates increase of over 5 percent. The high street may have been a major focus of the ‘business rates revolt’, but further cost rises for our industry are unpalatable. There are undoubtedly companies that will benefit from the changes, but on balance our industry looks to be getting a bad deal from the revaluations – this is especially galling as we have long campaigned for low energy manufacturers to be incentivised and it makes no sense to include plant and machinery in rateable value when trying to drive investment and job creation.”

Other points from the BWF Joinery State of Trade Survey Q4 2016 included:

- A balance of 26% of joinery companies reported an increase in sales volumes for Q4 2016 from the previous quarter. This follows on from 55% of joinery companies reporting an increase in sales volumes in Q3 2016 from Q2 2016.

- Manufacturers felt that sales volumes would improve in the next quarter, with a balance of 34% predicting an increase for Q1 2017, and a balance of 22% predicting an increase over the next year.

- 19% of companies reported a current order book of future work extending beyond 3 months – down 9% from the previous quarter - with 58% now saying that their order book extended from between 1 and 3 months.

- Demand was listed as the most likely constraint on output over the next year by 45% of respondents. Capacity and labour availability came next, with 21% and 18% of respondents feeling that they were most likely to constrain output.
Raw material prices had become the main factor for 13%.

- 39% of respondents on balance reported increasing their labour force in the last year, with 57% of respondents anticipating an increase labour force over the next year.

- Raw material costs were noted as the main inflationary factor for unit costs for 87% of respondents, with wages/salaries increases pushing up unit costs for 81% of respondents on balance.

- Exchange rates were a factor in inflating unit costs for 57% of respondents – having risen from 5% a year previously.

- 67% of respondents on balance reported an inflationary impact in unit costs through fuel costs.

- Investment in product improvement had been increased by 50% of companies on balance over the past year, with a balance of 51% to boost investment over the next year.

- Investment in manufacturing equipment spending had been increased by 53% of companies on balance over the past year, with a balance of 66% to boost investment over the next year.

www.bwf.org.uk