|
Report from
Europe
EU tropical wood import quantity heading for an
historic low
Total EU27 imports of tropical wood and wood furniture
of 358,100 tonnes in the third quarter of this year were
down 4% compared to the previous quarter and 10% less
than in the same quarter last year.
The latest figures mean that imports in the last four
quarters, averaging around 350,000 tonnes, have been well
below the long-term average of closer to 450,000 tonnes
(Chart 1a). In the first nine months of 2024, the EU27
imported 1,066,400 tonnes of tropical wood and wood
furniture, 14% less than the same period in 2023. In
quantity terms.
EU imports of tropical wood and wood furniture products
this year look set to be at the lowest annual level ever
recorded since the EU was first formed (as the EEC) in
1957.
The trade figures look healthier when considered in value
terms. EU27 import value of tropical wood and wood
furniture in the third quarter this year was US$763 million,
5% less than the previous quarter and just 0.7% down on
the same quarter last year.
In value terms, EU27 tropical wood product imports are at
the same low, but broadly stable, level prevailing between
2013 and 2019 (Chart 1b). In the first nine months of
2024, the EU27 imported tropical wood and wood
furniture with total value of US$2284 million, 9% less
than the same period in 2023.
OECD forecasts slow growth in Europe
The latest edition of the OECD Economic Outlook
published on 4 December forecasts growth of 0.8% in the
eurozone in 2024, up from 0.5% last year and then rising
to 1.3% in 2026 and 1.6% in 2028. Although the forecast
recovery is some cause for optimism, both the current rate
of growth and the speed of recovery is slower than in all
other major economies except the UK and Japan. The
forecast was also prepared before recent political events in
France further dampened growth prospects in the
eurozone’s second largest economy.
OECD note that while consumer confidence has been
rising again in the EU and the housing market is beginning
to show signs of recovery in a few countries such as Spain
and France, industrial production and real business
investment are still largely stagnant across the region.
Amongst EU economies, Spain and the Netherlands are
highlighted as having experienced relatively robust
growth. In Germany, OECD note that while quarterly
output rose slightly in the three months to September
2024, weak sentiment continues to weigh on investment
activity. Germany's economy is projected to stagnate in
2024 and grow by 0.7% in 2025 and 1.2% in 2026.
On prospects for the eurozone economy, OECD suggest
that lower interest rates and ongoing spending of the
Recovery and Resilient Facility funds will support
investment, while private consumption growth will benefit
from tight labour markets and further disinflation.
However, moves towards a more restrictive fiscal stance -
necessary to reduce historically high budget deficits - will
dampen growth in some member states. OECD project that
core inflation in the eurozone will fall from 2.9% in 2024
to 2.4% in 2025 and 2.0% in 2026. This will provide space
for the European Central Bank to reduce interest rates to
boost growth.
The OECD forecast of eurozone growth takes account of
political uncertainty in Germany after the failure to
conclude negotiations on the 2025 budget and the fall of
the coalition government in November. However, the
forecast came before the collapse of the French
government on 4 December after Prime Minister Michel
Barnier was ousted in a no-confidence vote.
As things stand therefore, neither France nor Germany, the
EU's two largest economies which together account for
over 40% of the bloc's GDP, has a sitting government.
Germany is expected to hold a Federal election on 23
February 2025, but in France there can be no new
assembly elections until at least twelve months after the
snap election held in July this year.
This political vacuum at the heart of the EU may hamper
efforts to address Europe's burgeoning deficits and falling
competitiveness. The recent collapse of governments in
both countries was driven by deep political divisions over
fiscal policy. With the political landscape increasingly
polarised, whoever forms the new government in each
country will likely face difficulties pushing necessary tax
and spending proposals through.
Even before the ink was dry on the OECD's forecast of
0.9% GDP growth in France next year, and 1% in 2026,
forecasters were revising down their numbers in response
to the political crisis. According to an article in the Times
of London, "the French economy is unlikely to collapse
but will have to pull out the stops to grow by 0.5% next
year".
Steep decrease in new construction orders in the
eurozone
The weakness of the EU construction sector remains a
significant concern for the EU’s timber industry. Forward-
looking indices show that EU construction activity
continues to decline. The HCOB Eurozone Construction
PMI Total Activity Index — a seasonally adjusted index
tracking monthly changes in total industry activity —
posted 42.7 in November, down slightly from 43.0 in
October. The latest data was indicative of a steep decrease
in total output in the penultimate month of 2024.
According to HCOB, the rate of decrease in eurozone
construction activity quickened in November amid a
contraction in new orders, which fell at the strongest rate
since September 2023. The decline in activity was driven
by broad-based contractions across the three monitored
economies, led by the strongest fall in Germany since
April. French firms recorded a strong decrease that was
nonetheless the softest for a year, while firms in Italy saw
the least pronounced decline since May.
The housing sector continued to weigh heavily on total
output and was the worst-performing sector, though the
robust decline was nonetheless the softest for 14 months.
Civil engineering activity saw the softest fall since August.
However, commercial building firms recorded the
strongest contraction for three months.
Continuing slow recovery in EU27 tropical wood
furniture imports in Q3
After a very slow start to the year, EU wood furniture
imports from tropical countries continued to make up lost
ground in the third quarter. In the first nine months of the
year, the EU27 imported 217,300 tonnes of wood furniture
from tropical countries with a total value of US$914
million.
Import quantity and import value were up 7% and 4%
respectively compared to the same period in 2023. In the
first nine months of this year compared to the same period
in 2023, EU27 import value of wood furniture increased
from Vietnam (+12% to US$385.1 million), India (+12%
to US$195.0 million), Malaysia (+20% to US$68.9
million), and the Philippines (+2% to US$6.2 million).
However, import value fell from Indonesia (-12% to
US$240.5 million), Thailand (-32% to US$10.6 million),
and Mexico (-20% to US$2.6 million). EU27 wood
furniture imports from all other tropical countries were
negligible during the period (Chart 2).
EU27 imports of tropical sawnwood down 20% in the
first nine months of 2024
The EU27 imported 527,600 cu.m of tropical sawnwood
in the first nine months of this year, 20% less than the
same period in 2023. Import value of this commodity was
US$487.1 million in the January to September period this
year, also 20% less than the same period in 2023.
Imports declined from nearly all leading supply countries
during the period including Cameroon (-18% to 203,100
cu.m), Gabon (-23% to 79,000 cu.m), Brazil (-20% to
64,900 cu.m), Republic of Congo (-24% to 51,900 cu.m),
Malaysia (-11% to 46,500 cu.m), Ghana (-30% to 11,900
cu.m), Côte d’Ivoire (-30% to 7,000 cu.m), Suriname (-8%
to 5,600 cu.m), the Democratic Republic of Congo (-54%
to 4,800 cu.m), and the Central African Republic (-57% to
4,400 cu.m).
Sawnwood imports from Ecuador bucked the overall
downward trend in the first nine months of this year, at
12,500 cu.m, up 25% compared to the same period in
2023. Imports from Vietnam also increased, by 46% to
4,800 cu.m (Chart 3).
The EU27 imported 98,200 tonnes of tropical
mouldings/decking in the first nine months of this year,
12% less than in the same period in 2023. Import value of
this commodity was down 19% to US$172.4 million in the
same period.
During the first nine months, imports increased year-on-
year from Peru (+12% to 10,000 tonnes) but fell from all
other leading supply countries including Brazil (-20% to
33,300 tonnes), Indonesia (-1% to 32,200 tonnes), Gabon
(-23% to 6,300 tonnes), Malaysia (-10% to 4,500 tonnes),
and Bolivia (-13% to 4,200 tonnes) (Chart 4 left).
The EU27 imported 26,900 cu.m of tropical logs with a
total value of US$16.6 million in the first nine months of
this year, respectively 64% and 65% less than in the same
period last year. The decline was driven mainly by an 91%
decline in imports from the Republic of Congo to 3,400
cu.m.
This follows the ban on exports of most logs from the
country since 1st January 2023. EU27 imports of logs in
the first nine months of this year were also down
compared to the same period last year from the Central
African Republic (-44% to 7,500 cu.m), the Democratic
Republic of Congo (-24% to 5,200 cu.m), Cameroon (-
54% to 3,800 cu.m), and Guyana (-41% to 1,000 cu.m).
However, EU27 log imports increased from Paraguay
(+263% to 2,800 cu.m), and Ecuador (+37% to 700 cu.m)
during the nine-month period (Chart 5).
EU27 imports of tropical hardwood veneer, plywood
and joinery sliding this year
The EU27 imported 185,200 cu.m of tropical veneer with
a total value of US$125.6 million in the first nine months
of this year, down 12% and 13% respectively compared to
the same period last year.
Imports of tropical veneer from Gabon, by far the largest
supplier to the EU27, were 103,000 cu.m in the first nine
months of this year, 7% less than the same period in 2023.
EU27 imports of this commodity also decreased during the
period from Côte d'Ivoire (-17% to 37,300 cu.m),
Cameroon (-28% to 19,800 cu.m), Indonesia (-11% to
2,300 cu.m), and Equatorial Guinea (-84% to 800 cu.m).
Veneer imports into the EU27 increased during the nine-
month period from the Republic of Congo (+43% to 8,300
cu.m), the UK (+49% to 6,200 cu.m), and Ghana (+8% to
5,200 cu.m). (Chart 6).
The EU27 imported 204,700 cu.m of tropical plywood
with a total value of US$149.0 million in the first nine-
months of this year, respectively 1% and 2% less than the
same period last year.
Imports fell from the three leading supply countries during
the period including Indonesia (-16% to 55,600 cu.m),
Gabon (-2% to 48,700 cu.m), and China (-4% to 24,300
cu.m). Imports from Brazil were also down, by 4% to
11,500 cu.m, while indirect imports via the UK fell 34% to
5,400 cu.m.
However, these losses during the nine-month period were
partly offset by rising imports from Vietnam (+94% to
19,500 cu.m), Morocco (+20% to 13,900 cu.m), Paraguay
(+59% to 6,100 cu.m), and Malaysia (+78% to 5,300
cu.m) (Chart 7).
The EU27 imported 12,700 tonnes of tropical wood
flooring with a total value of US$33.1 million in the first
nine months of this year, down 20% and 28% respectively
compared to the same period in 2023.
Imports of 5,800 tonnes from Malaysia in the nine-month
period this year were 28% less than the same period in
2023. Flooring imports also fell from Indonesia (-35% to
2,400 tonnes) and Brazil (-53% to 400 tonnes). However,
imports increased from Vietnam (+42% to 3,000 tonnes)
(Chart 8).
The value of EU27 imports of other joinery products from
tropical countries, which mainly comprise laminated
window scantlings, kitchen tops and wood doors, was
US$152.9 million in the first nine months of this year.
Tere was little change compared to the same period in
2023. Import quantity was up 7% to 66,000 tonnes during
the same period.
Between January and September this year, EU27 import
value of other tropical joinery products was down 15% to
US$44.4 million from Malaysia.
Indirect imports from the UK also fell, by 12% to US$3.8
million. However, import value increased 6% to US$61.8
million from Indonesia and was up 35% to US$14.3
million from Vietnam.
In a potentially significant longer-term development, given
efforts in central Africa to shift up the value chain as log
exports are banned, EU import value of laminated joinery
products in the first nine months of 2024 was up 31% to
US$9.8 million from the Republic of Congo and up 30%
to US$2.6 million from Cameroon (Chart 9).
|
