Category: 2014

After a period of turbulence during the years of the EU recession, the EU plywood market has stabilised and shown signs of recovery in the last 18 months. Supply and prices have also become more consistent and the industry appears to have adjusted well to the new demands of the EUTR.

After showing signs of recovery in the first half of 2014, the market for wood flooring in Europe slowed in the second half of the year. Competition from substitute products continues to intensify. Political tensions and economic slowdown in Russia have undermined export demand. These were the main conclusion of a meeting of the Directors of the European Wood Flooring Federation (FEP) on 30 September 2014.

An 80m ekki bridge made a fitting programme illustration for the international forum of the Association Technique Internationale des Bois Tropicaux (ATIBT) in Amsterdam last week. The bridge uses wood from the FSC-certified Cameroon concessions of Dutch producer trader and construction specialist Wijma, and now features in a YouTube video (www.youtube.com/watch?v=-ZA823Uwy_g) highlighting the sustainable credentials and technical strengths of tropical timber.

This analysis of EU wood furniture supply draws on production data from the Eurostat database of manufacturing statistics and trade data from the Eurostat COMEXT database. In line with Eurostat practice, all value data is reported in euros. The data covers all types of wood furniture with the exception of kitchens. Kitchen furniture is excluded because it is supplied almost exclusively by domestic manufacturers and is therefore less relevant to overseas manufacturers. In practice, the EU’s kitchen furniture industry has more in common with the joinery sector than with other parts of the furniture industry.  Note that while all data is ultimately derived from Eurostat, it has been subject to significant adjustment during preparation of this report in an effort to remove numerous inconsistencies.    

The latest Eurostat data shows that the EU market for veneers has suffered severely in recent years. The supply of veneers to the EU fell 33% between 2007 and 2013 due to the combined effects of economic crises, the decline of domestic plywood manufacturing capacity and competitive pressure from a wide variety of substitute wood and non-wood materials (Chart 1).

The EU28 group of nations recorded only 0.2% GDP growth in the second quarter of 2014, down from 0.3% in the first quarter (Chart 1). The slowdown was largely due to contraction in Germany, Europe’s biggest economy. After expanding 0.7% in the first quarter of 2014, Germany’s economy slipped 0.2% in the second quarter of the year as foreign trade and investment, particularly in the construction sector, weighed on growth. Meanwhile France recorded zero growth for the second quarter in a row between April and June 2014, while Italy’s economy continued to contract.

Although there has been some shifting between product groups, total EU imports of tropical hardwood products in the first half of 2014 hardly recovered from the historically low levels recorded in the previous two years.

The market impact of the EU Timber Regulation (EUTR) has been a major concern for the European timber trade and policy makers.  Now that over a year has passed since coming into force, trade interests are raising concerns about inconsistent application across the EU and even within Member States, lack of clear guidance on key elements such as risk assessment, and the need for a greater focus on commercial implications and on evolution of cost-effective mechanisms for compliance, particularly amongst smaller companies that are so important in the timber trade. Equally NGOs are raising concerns about lack of visible progress by some EU Member States to develop enforcement regimes. This in turn has encouraged the European Commission to take measures to ensure that all Member States honour their commitments to implement and enforce EUTR.

In the first six months of 2014, EU28 imports of hardwood plywood were 1.21 million m3, 12% more than the same period the previous year. This follows stable imports between 2012 and 2013 (Chart 1).

According to the latest half-yearly report issued in June 2014 by the Euroconstruct research agency, aggregated construction output for the EU countries fell by 2.7% in real terms in 2013 to the lowest level in 20 years (at constant prices). However, Euroconstruct report that the European construction market hit bottom last year and forecast average growth of 1.8% per year between 2014 and 2016. This new growth rate forecast is 0.2% greater than the previous Euroconstruct forecast in November 2013.