The rate of growth in European economies has slowed as the global economy has remained subdued but, as delegates at last week’s European Softwood Conference in Paris heard, the timber industry is relatively buoyant. Most producer countries reported a rise in sawn softwood output, with exports taking most of the extra volume.

But fluctuations between the euro and the US dollar have hit export opportunities and the European Organisation of the Sawmill Industry has appealed to the European Central Bank to control the euro’s value.

As the economic climate improves, the forecast is largely positive. This year, softwood consumption in Europe and North America is expected to be 1.1% below that of 2002, but is expected to pick up again next year, rising to 329 million m3. Strong activity in the European construction sector is expected to be maintained, pushing sawn softwood consumption close to 90 million m3. With the US housing market buoyant and the Japanese housing market improving, there should be healthy demand for European sawn timber.

Sawmillers are now supporting a pan-European timber promotion by the European Timber Council which aims to develop markets in Asia with marketing, introduction of new building systems, and standardisation and education initiatives.

The UK

In 2002, UK softwood imports rose by 2.9% to 7.68 million m3 but consumption fell 1.4% to 7.53 million m3. This, combined with slightly higher domestic production, offset by greater export volumes, resulted in lower total consumption of 9.74 million m3.

Sales of softwood into new housing rose slightly in 2002 thanks to timber frame growth.

The value of the RMI sector grew by 2% in 2002 – boosting consumption by 60-80,000m3.

Import volumes are expected to fall by 1% this year and next. But, with relatively stable stock holdings, slightly higher domestic production and lower exports, overall consumption is expected to rise to 9.9 million m3 and remain at this level in 2004.

Sweden

Swedish sawn softwood production rose by 0.6 million m3 to a new record of 16.6 million m3 last year and exports grew by 24% to a new record of 11.45 million m3. Sales volumes to the US rose by 75% and to Japan they were up 23% – compared with European export growth of 54% and 9% respectively.

Latvia

Investment in Latvia continues, especially in developing more value-added products – and this partially accounts for the increase in the value of exports. In the first half of 2003, export revenue was up 25.7% on the same period last year. The UK still takes the lion’s share of Latvia’s timber exports but manufacturers are trying to develop other markets – in particular Japan, where exports have risen by around a quarter.

Russia

As domestic demand slowed in 2002, Russia’s sawn softwood producers increased their exports by 18%. As with other producer countries, Japanese demand played a major role and trade volumes to this market – Russia’s second largest behind Egypt – were up by 87.5%. Deliveries to Ireland and Belgium also rose significantly. The Russian delegation predicts that, if industry growth continues at the current rate, softwood production could total 17 million m3 this year – up from 16.7 million m3 last year.

Canada

Fuelled by strong North American demand – in particular for housing – Canadian sawn softwood production reached a record 78.6 million m3 in 2002 – a 7.6% increase over 2001. Sawn lumber exports totalled 49.9 million m3 and, despite a 27.22% tariff on Canadian sawn softwood entering the US, exports to the US rose 2.2% on the previous year. Shipments to Japan, Canada’s second largest market, fell by 6.5% while exports to Europe rose by 11%. However, despite healthy demand, overcapacity has kept prices down.

Demand is expected to remain strong for the remainder of the year but fall back slightly next year. In addition, in the US Canada is facing increasing competition from imports and the strong Canadian dollar is reducing revenue.

Norway

A slowdown in Norwegian housebuilding and other construction has been balanced by a strong RMI sector but this is unlikely to be sustained.

While Norway’s exports rose slightly in 2002, sawn softwood shipments to Germany – its largest market – and the UK – its third largest market – continued on a downward trend. This decline is likely to put total exports for 2003 close to the 2001 level of 593,000m3.