The global wood industry faces economic challenges amid sluggish growth in key regions like China, the US, and Europe. Stable nominal price fluctuations characterize the European market, with tightening competition due to lower raw material supply. Weak construction activity globally dampens softwood lumber consumption, leading to decreased exports from countries like Finland. Recovery is anticipated next year, driven by expected interest rate cuts stimulating construction demand, while this year's lumber demand is predicted to remain stagnant, with a slight decrease in exports and production.<\/p>\n
The world economy is still in stagnation<\/strong><\/p>\n The growth prospects of the global economy continue to decline \u2013 economic growth in both China and the United States is slower this year than last year. In Europe as well, economic growth continues to be sluggish like last year. The German economy shrank last year, and no significant pick-up in growth is expected this year either. Germany is currently not the same engine of the European economy that we are used to seeing it as.<\/p>\n Next year is expected to be better both in the United States and in Europe, but growth in China will fade even further. China's growth potential has been permanently weakened due to structural problems weighing on the economy. Next year's economic development, however, involves significantly greater risks than usual due to the geopolitical situation.<\/p>\n The slowdown in inflation and the gradual decline in interest rates pave the way for Europe to a smooth growth career, from which the significant drivers of growth are, however, exhausted. The European Central Bank will start interest rate cuts in early summer - before the United States. While the US economy is only now showing signs of cooling down, economic growth in Europe has been subdued for a long time. Although there are seasonal differences in interest rate developments in the euro area and the United States, the differences in the overall development are small to such an extent that there are no significant changes in the euro-dollar exchange rate in terms of macroeconomic development.<\/p>\n The price fluctuation of wood species has leveled off in Europe<\/strong><\/p>\n In Europe, the nominal price fluctuation of wood species has leveled off compared to the fluctuations of the last couple of years. In the European countries such as Austria, Sweden, Germany, the Czech Republic and Estonia, the price development of wood varied slightly between logs and pulpwood at the end of last year. In Estonia, the price of softwood logs has been falling since last autumn, while in other countries the price trend for logs was on the rise. The increase in the price of sawlogs was most evident in Austria, the Czech Republic and Sweden. Changes in the nominal prices of softwood were more moderate at the end of last year. In Germany, the price of softwood has been falling since the second quarter of last year, while in Austria and the Czech Republic the decline stopped by autumn. In Sweden, on the other hand, the price development of softwood pulpwood was bullish throughout last year.<\/p>\n The demand for wood remained relatively high in the European wood market last year, taking into account the general uncertainty of the economy. In the Baltic Sea region, the tightening of competition has been reflected from the Finnish wood market to other countries, which is the result of the lower supply of raw material, with the amount of wood imported being lower than usual. This has limited the availability of raw material and increased competition between wood buyers, especially in the Baltics. In Sweden, wood had to be used last year in large quantities, because due to the increase in wood prices, not enough wood was obtained for the needs of the forest industry. The situation was partly eased by the waning demand in the end product market and the decline in production in the forest industry. In Central Europe, in addition to the economic uncertainty, the wood market was also affected by the amount of destroyed wood. This has an impact on the supply of wood, especially regionally, although the amount of destroyed wood is normalizing compared to the peaks of a few years ago.<\/p>\n The demand for lumber remains weak<\/strong><\/p>\n The weak economic situation in construction has weighed on sawnwood consumption worldwide, as a result of which Finnish softwood lumber exports decreased last year. Construction starts decreased last year in Finland and in key export countries for the Finnish sawmill industry, such as Japan, China, Great Britain and Germany.<\/p>\n The current year will not bring a change for the better, because even if the central banks lower interest rates this year, it will take time before the demand for construction starts to recover and the stock of unsold apartments of construction companies decreases. Thus, only next year will the number of construction starts begin a cautious rise again, and at the same time the demand for lumber will pick up. In the current year, the demand for lumber will remain close to last year's figures. This year, the amount of lumber exports and production will decrease by one percent compared to last year. Next year, with the recovery of demand, the export and production of lumber will increase somewhat. The amount of production increases slightly more than exports due to the recovery of domestic demand.<\/p>","protected":false},"excerpt":{"rendered":" The global wood industry faces economic challenges amid sluggish growth in key regions like China, the US, and Europe. Stable nominal price fluctuations characterize the European market, with tightening competition due to lower raw material supply. Weak construction activity globally … Continue reading