Ron Caddy

Lamcal Building Supplies

As I see the traditional timber merchant’s retail and trade business over the next two years.

Competition will continue to increase as the big boxes fight for the hearts and minds of the consumer.

At the same time their advertising has increased awareness of the possibilities of DIY, and has helped grow the retail market, and they will continue to fight to consume that growth.

Profits will continue to be squeezed and merchants will need to be come very efficient in the handling of product, and have good stock control, not necessarily less stock, but the right mix and always in stock.

Staff will need to be given the tools that will enable them to be more efficient, and the equipment will have to make it safer, as OH&S issues will dominate the future.

And, it will be very expensive to those who do not address it, at all levels.

As staff shortages are a real threat, merchants will need to make sure they have the right well-trained and renumerated staff and not put up with mediocre performers.

The change in legislation should help right this imbalance that has existed.

This change should also encourage poor performers to shape up and realise the good money will go to the talented and those who want to excel, and that can only be a win/win.

The demise of the Timber Promotion Council (Vic) is of concern as is the control the state government (itself controlled by the greens) now has over forests.

The government, to appease the greens, can now control which forests it wants to lock up by simply pricing the logs off the market, and forcing closedowns.

I believe this situation will continue and force timber prices higher than normal, as well as increase skilled staff shortages.

The market is a mixed bag and hard to predict. It has slow over the last three months, and a slowdown is long overdue, but with interest rates predicted not to increase it does not seem that a crash is likely.

As there has not been a severe slowdown or crash as we saw in pre 1990s, and the younger managers have not experienced life under those conditions.

They will need to be wary, as operating in a severe downturn can reverse what they’ve learnt over the last 15 years.

Tough and painful decisions must be made quickly to survive, in times of little or no profit, or even extended periods of loss.

I see the next two years as interesting, and managers will need to know how their company is performing, daily, weekly and monthly. And there are plenty of tools to make this so.

A finger on the pulse on all facets of the business is still the key to survival and growth, and never underestimate gut feel or intuition.