38HK_planned logging corona.jpg

Corona and economic survey Q1 2020 © Holzkurier

corona and economic survey

Impending beetle problem

Article by Günther Jauk (translated by Eva Guzely) | 08.04.2020 - 11:27
38HK_fall in demand corona.jpg

Corona and economic survey Q1 2020 © Holzkurier

Due to the corona crisis, three quarters of Austrian forestry companies clearly reduced planned logging for the time being (50%) or stopped logging completely (25%). In Holzkurier’s online survey, hardly anyone (4%) reports no reduction at all in logging. In line with this, more than 80% of respondents feel an extreme or at least clear fall in demand.

Remove damaged wood from forests

On the one hand, there are not enough workers, especially those who come from abroad for care measures. On the other hand, there are no log sales and as a result no turnover for many companies. Numerous forestry companies report massive problems with sales. Wood which has already been harvested reportedly remains in the forests, because sawmills reduce cutting considerably or stop it entirely. While there is hope that the situation is going to ease soon, the first water storages are already being created.

Additionally, there is damaged wood waiting to be removed in many dictricts which should be taken out of forests as soon as possible. It is mainly the impending, hardly predictable development of the bark beetle problem which is giving forestry companies a headache. Furthermore, there is concern over the loss in quality and value of sawlogs if there are no water storage capacities or if those capacities are not sufficient.

Downsizing or short-time work

While some forestry companies are desperately looking for economical workers for care measures, reforestation or similar tasks, numerous logging companies are sent home or have stopped offering their services in the past weeks. “The question is how many of those companies are going to economically survive this situation, if it lasts longer,” one respondent points out. Sooner or later they are going to be urgently needed.

Additionally, nearly one quarter of forestry companies plans to reduce the number of employees in the next half year. More than 70%, however, do not want to change the number of staff. Some companies have already registered employees for short-time work. Others are at least thinking of doing the same in the coming months.

Log prices expected to fall

Forest hygiene measures in small forest properties are also reason for concern. Due to the current situation and the impending bark beetle season, these measures must not be neglected. However, with log prices being so low, who will go in the forests if they do not have to? This is how the numerous comments on this topic can be summed up.

As for the next half year, the vast majority of forestry companies (71%) expect falling log prices. Only three months ago, 70% of respondents expected an increase in prices in the first half year of 2020.

20% clearly at risk

38HK_risk company corona.jpg

Corona and economic survey Q1 2020 © Holzkurier

Due to the current situation, expectations regarding the coming months have significantly deteriorated. 93% of respondents expect a negative development of their business situation and 86% are preparing for falling sales. Not one respondent expects a positive development of the business situation or an increase in sales.

If the current situation lasts longer than until the end of May, 43% think that their forestry company is not going to be at risk or that it will be hardly at risk. 38% describe the risk as moderate and 20% as clear. None of the forestry companies which participated in the survey, described their own company as being massively at risk.