The fourth quarter of 2025 can be summed up as a period of, one, low activity levels, two, an abundance of caution being shown by all, and three, a rush to close out the year and come back to start afresh in 2026.

Demand from construction sites for engineered timber products slowed at the back end of the fourth quarter and businesses also took proactive steps to reduce their inventories in the run up to their financial year ends, which resulted in poor delivered volumes. There are still pockets of activity in certain regions, and surely this linked to affordability. Could it be that in 2025 we actually ended up building fewer new homes than in 2024?

There is still demand for softwood products in the market. Projects are being started and, of course, the need to repair and maintain will always continue. Reports from our customer base are that their customers are extremely cost conscious and are shopping around to get the best possible price. Unfortunately, this is often a symptom of businesses’ weak order books and subsequently having time on their hands.

In Europe, where a lot of the UK’s strength graded timber, joinery grade softwood, and engineered wood products are supplied from, log supplies reduced in both the Nordic countries and central Europe because the primary consumers of round wood are no longer willing to pay the extremely high prices forest owners have been demanding. This, together with weak demand across most main European markets, resulted in production curtailments being taken, many in the form of extended Christmas holidays.

We start 2026 with supply chain inventories in relative balance. Should either a lack of production, or excessive demand materialise in the first quarter, we can expect to see very aggressive moves to push prices up in the second quarter.