Uncertainty caused by the Iraq war and fear of a global SARS epidemic are affecting global consumer confidence, according to Finland’s Stora Enso.

The company reported first quarter pre-tax profits of €129.3m, down almost half from the €240.5m recorded this time last year. Sales were €3.1bn, a 3.5% decrease on the previous quarter.

The timber products market is expected to remain stable. Demand in the US is being driven by interest rates, which remain low.

Meanwhile Swedish forestry group Södra announced increased pre-tax profits of SKr274m for the first quarter.

This figure was up from SKr 84m during the same period last year, while sales increased from SKr 2.8bn to SKr3.4bn.

&#8220The uncertainty about the world economy continues and the current indications are that demand for pulp and sawn timber products will be weak in the second half of the year.”

Södra president Anders Wahrolén

Demand was reportedly good across the group’s products areas. A good balance was achieved between supply and demand for sawn timber but prices levelled out after a period of rises.

Södra president Anders Wahrolén said: “The uncertainty about the world economy continues and the current indications are that demand for pulp and sawn timber products will be weak in the second half of the year.”