At the end of the third quarter of 2022, expectations of the Austrian and German sawmill industries were as low as they had been at the beginning of 2020 when the coronavirus pandemic started. Four months ago, 75% of the surveyed companies expected falling sales and 59% expected a negative development of their business situation.
Looking back on the fourth quarter of 2022, however, more than two thirds of the companies which participated in the Holzkurier’s economic survey described the sales they generated as satisfactory and 20% as strong. An even more positive assessment was given regarding the business situation. It was satisfactory for more than half of the respondents and good for almost 40%. Only 8% of sawmills reported a bad business situation.
As for the current quarter, more than half of the respondents expect constant sales and a satisfactory development of their business situation. However, around one third of sawmills think that sales will fall and the business situation will see a negative development.
Prices expected to rise
Most sawmills expect prices to rise in the first quarter of 2023. When it comes to log wood, 53% of respondents think that prices will rise, while 37% expect them to remain constant, and 10% assume that log prices will fall. As for lumber prices, 68% of sawmills expect an increase, 20% do not think that there will be any change, and 12% expect a decrease.
Constant stock levels
Lately, there has been little change in stock levels. In line with the season, 49% of the surveyed sawmills reported normal stock levels in the fourth quarter of 2022, while 31% described them as low and 20% as high. 68% of the survey participants expect stock levels to remain unchanged in the current quarter.
The assessment of the sawmill industry’s willingness to invest recently improved somewhat. 53% of the respondents assume that it will remain the same in the next six months, while 42% expect a decrease.
Supply, staff, energy
When asked about the biggest challenges they are facing at the moment, the sawmill owners gave quite similar answers at the turn of the year (see box below). In addition to the difficulty of finding (qualified) staff in sufficient numbers, which has been a growing problem for years, the high cost of electricity was another big issue last year – and a factor that has hardly played a role in sawmills’ calculations so far. Furthermore, sawmills reported that procuring log wood was becoming increasingly difficult.
The biggest challenges at the moment*
- shortage of workers, cost of energy
- implementing higher lumber prices
- cost of energy, inflation, rising cost of transporting log wood/lumber
- employee retention, development of wages and economic situation of the construction sector, inflation
- Not getting too impatient when demand decreases in the short term; the need for wood is there.
- procurement of log wood and sawmill byproduct sales/development of prices
- prices set by big sawmills and strong fluctuation of lumber prices
- having sales prices reflect purchase prices of goods and raw materials
- cost of energy, scarcity of log wood, shortage of (skilled) workers
- Great uncertainty when it comes to planning; we live from day to day.
- shortage of (skilled) workers, energy prices
- price of raw wood and availability on the one hand, low sales prices and great uncertainty on markets on the other
- high log prices, especially for long log wood; low lumber prices
- shortage of (skilled) workers, rising log prices
- high log price and weak sales
- selling products at prices which take energy and labor costs into account
- high energy prices and uncertainty about their further development
- decrease in construction activity
*Quotes from the economic survey, not edited
