Sweden\u2019s forest industry has begun 2026 under pressure, with falling output, weaker exports and little sign of a near-term rebound.<\/p>\n
A new report from Skogsindustrierna \u2014 the Swedish Forest Industries Federation \u2014 points to a sector squeezed by weak European demand, shifting trade flows and rising geopolitical risks.<\/p>\n
Production of wood products fell 14% in the first two months of the year compared with 2025, while pulp and paper exports also declined.<\/p>\n
Demand in Europe still the problem<\/strong><\/p>\n The core issue remains Europe.<\/p>\n Christian Nielsen, who tracks the sawmill market at Skogsindustrierna, says the slowdown that began in autumn has intensified at the start of the year, as a weaker economic backdrop continues to weigh on construction-driven demand.<\/p>\n Swedish sawmills are heavily exposed to European building activity. With housing and renovation still subdued, order books remain thin.<\/p>\n Germany offers a rare bright spot. Imports from Sweden are rising, driven by shortages of domestic raw material. But the uplift is narrow and does little to offset broader weakness.<\/p>\n Geopolitics raise costs, not demand<\/strong><\/p>\n The war in the Middle East is feeding through into higher freight costs and disrupted trade routes.<\/p>\n For an export-heavy industry operating far from its end markets, that matters. Transport costs are rising just as volumes fall.<\/p>\n Yet the impact is not uniform.<\/p>\n Nielsen points out that Swedish producers are less exposed to energy price swings than many competitors, as production relies heavily on internally generated bioenergy.<\/p>\n That offers some insulation at a time when energy remains volatile.<\/p>\n There is also a potential second-order effect. Higher oil prices could lift the cost of plastics, narrowing the gap with paper-based products and supporting demand for packaging.<\/p>\n Competition intensifies in pulp and paper<\/strong><\/p>\n Pressure is building not only from weak demand, but from stronger competition.<\/p>\n Charlotte Dickens, who covers global pulp and paper markets at Skogsindustrierna, points to a clear shift: producers from China and Brazil are gaining ground in Europe.<\/p>\n That is the key battleground. More than half of Sweden\u2019s forest product exports go to European markets, making the region critical for pricing and volumes.<\/p>\n As new suppliers expand their presence, prices and margins are coming under strain.<\/p>\n Industry shifts to defence<\/strong><\/p>\n Companies have responded with cost cuts and production adjustments, moving quickly to protect margins in a weaker market.<\/p>\n According to the federation, the focus on lowering production costs is likely to strengthen companies over time. But for now, the industry is in retrenchment mode.<\/p>\n No quick recovery<\/strong><\/p>\n The outlook remains subdued.<\/p>\n European demand is still fragile, competition is rising and geopolitical tensions continue to reshape trade flows and costs.<\/p>\n Sweden\u2019s forest industry retains structural strengths \u2014 strong resource base, high export capacity and integrated bioenergy \u2014 but these are not enough to offset current market conditions.<\/p>","protected":false},"excerpt":{"rendered":"","protected":false},"author":1,"featured_media":98359,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[5204],"tags":[],"class_list":["post-98358","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-daily-news"],"acf":[],"yoast_head":"\n