Category: 2013

Share of imports in total EU wood furniture supply peaked at 16% in 2010 and then fell away again to 13% in 2011 (see February 2013 report). Eurostat has yet to publish furniture production figures for the whole of the EU in 2012, however the data already available suggests that import penetration rebounded again last year. The Eurostat index of furniture production in the EU, which was rising in 2011, fell throughout the course of 2012 (Chart 1). However the total value of EU27 wood furniture imports (from outside the EU) increased by 3.8% to €5.39 billion (Chart 2).

European demand for African hardwood remains quiet, with orders in northern European markets similar to last year and demand very weak in southern Europe. However, low demand is balanced by restricted supply.

For the last 5 years, the Eurostat construction production index for both the EU27 and euro-area group of countries has fallen consistently, with only an occasional short-lived reversal (see figure 1 below).  In the first quarter of this year, EU-27 construction activity reached new lows. The index during the January-March 2013 period was down 5.2% compared to the same quarter in 2012, and down 2.8% compared to the previous quarter.

The month of March 2013 is likely to be remembered as a major turning point for the European wood industry. Not only did it mark the introduction of the EU Timber Regulation (EUTR), but it also brought extremely bad economic news. Some newspapers and economists are now talking in terms of a “depression” in Europe. The fragile optimism of the opening weeks of the year has been dashed amid emerging signs that the recession is far from over.

In 2012, wooden floor consumption in Europe (excluding the UK) is estimated at 91 million m², a 4% decline compared to the previous year. Last’s years decline is a reversal of the trend in 2011 when there was a brief revival in European parquet consumption following a sharp fall in consumption following the financial crises between 2008 and 2010.

Prospects for the European economy seem more positive now than this time last year. The worst fears of a destructive “domino effect” that might have resulted from Greece or another country being forced out of the euro-zone have failed to materialise. The effects of the financial crises were largely contained within the most afflicted economies of southern Europe. The countries of central and north-western Europe, while experiencing higher than normal levels of economic volatility, have so far managed to weather the storm. Their relative stability has prevented the effects of the financial crises from trickling down throughout Europe. In recent months, several economic indicators in the EU, such as the Economic Sentiment Indicator and the Construction Confidence Index, have improved (see Charts 1 and 2). There is cautious optimism that economic reforms in the most troubled EU countries are beginning to work.

Hopes of a speedy recovery for the European construction industry have been dashed. Forecasts issued at the latest Euroconstruct meeting held in Munich during December 2012 suggest that the euro crises is continuing to hold European construction activity in check. Activity is being curbed by high unemployment, stagnant economic growth or even economic downturns in many places, as well as the strained financial situation of the public sector.