The Finnish Sawmill Industry Association conducted a survey of sawmill companies on the impact of the Middle East crisis on the economic and market situation from 19 to 23 March 2026. Based on the responses, the crisis is reflected in the sawmill industry primarily through logistics, costs and market uncertainty. The effects are rapid and widespread throughout the value chain.<\/p>\n
Approximately 80 percent of Finnish sawmill companies' production is exported to over 70 countries. In several key markets, demand for end products has been weak for several years due to general economic uncertainty and low construction activity.<\/p>\n
The Middle East and North Africa region has traditionally been an important market for the sawmill industry. In 2025, the value of sawmill exports to the MENA region was almost EUR 600 million. The five largest export countries were Egypt (EUR 254 million), Saudi Arabia (EUR 100 million), Israel (EUR 86 million), Algeria (EUR 62 million) and Morocco (EUR 42 million).<\/p>\n
A survey conducted by the Finnish Sawmill Industry Federation included 30 senior executives from sawmill companies, mainly sales managers and CEOs. 80 percent of the respondents estimated that the crisis had already had a negative impact on business, and none of the respondents saw any positive effects from the crisis.<\/p>\n
\"The economic situation in the sawmill industry has been difficult for a couple of years now. Domestic cost levels have been and continue to be heavy due to the high price of wood raw materials, and demand in international end-product markets has been weak. The acute crisis in the Middle East is prolonging the negative economic situation and darkening the outlook for the sawmill industry for the entire year,\" estimates Tino Aalto, CEO of the Finnish Sawmill Industry Association.<\/p>\n
For sawmill companies, logistics is the second largest cost item after raw material procurement, and the increase in costs is directly reflected in profitability. 97 percent of respondents to the survey said that logistics costs had increased, and 90 percent of companies have faced logistics challenges since the start of the crisis. Freight and transportation costs have increased, especially as a result of rising fuel prices and risk premiums for sea transport. Delays are also occurring in container traffic.<\/p>\n
In addition to North Africa and the Middle East, rising logistics costs and transport disruptions are reflected in the Asian market, which is another significant export area for the sawmill industry. In 2025, the value of exports to Asia was approximately EUR 500 million. The largest export countries were Japan (EUR 305 million), China (EUR 84 million) and the Philippines (EUR 41 million). A large part of cargo ships traveling to East Asia now have to go around Africa instead of the Suez Canal, which increases both fuel costs and transport time.<\/p>\n
\"Raising inflation and rising interest rates would be toxic to construction activity in key export markets. Export traction would require stability and predictability, which unfortunately is not in sight at the moment,\" concludes Aalto of Sawmilling.<\/p>\n
When asked about the impact of the crisis on the economic outlook for the current year, as many as 87 percent of respondents estimated the impact to be negative. Companies consider the biggest risks to be the continuous increase in cost levels, which are difficult to pass on to end product prices, and prolonged disruptions in key export markets.<\/p>\n
The effects of the crisis also extend to the wider economy. Increased uncertainty is weakening investment and construction, and rising interest rates and inflationary pressures may further dampen demand. Based on the responses, customer decision-making has already slowed down and transactions have been postponed.<\/p>\n
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