Expensive raw material, weaker sales
“The market weakness in combination with high raw material prices and increases in other costs led to very low profitability,” Jöbstl said, outlining the difficult situation. “With the exception of Southeast Asia, the large overseas markets didn’t help us this year either.” In 2024, softwood lumber production is expected to be 12% below 2021 levels. As for 2025, an increase of 2 to 3% is forecast, according to Jöbstl.
Jöbstl is particularly concerned about the fact that the raw material is in short supply despite the low production output. “We’re producing much smaller volumes than in 2021 and yet, we still don’t have enough wood. Log prices are rising even though production is decreasing,” Jöbstl analyzed. “If this continues, we will have to prepare for a generally higher log price.” He believes that his industry has a duty to pay more attention to yield and to further increase efficiency.
No upswing in China for years
According to EOS, the value of exports to non-EU countries plummeted by 33% year on year in 2023. In the first six months of 2024, it fell by another 2%. “Not too long ago, China was still a booming market. However, the ongoing crisis of the country’s construction industry will keep demand low for a while to come,” Jöbstl said.
The prospects in Southeast Asia, on the other hand, are very different. “Europe again managed to increase its exports there by 6% this year. In seven months, they already totaled 2.4 million m³,” Jöbstl reported. Germany delivered 500,000 m³ to the region, and Sweden exported 200,000 m³.
| Volumes in 1,000 m³ | |||||||
| Countries | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|
| Germany | 23,505 | 25,216 | 25,313 | 24,309 | 22,944 | 22,250 | 22,700 |
| Sweden | 18,600 | 18,400 | 19,050 | 18,800 | 17,800 | 17,100 | 17,600 |
| Finland | 11,354 | 10,900 | 11,900 | 11,200 | 10,400 | 10,000 | 11,000 |
| Austria | 10,343 | 10,339 | 10,582 | 10,100 | 9,100 | 9,581 | 9,700 |
| France | 6,559 | 6,400 | 7,000 | 7,000 | 6,700 | 6,400 | 6,500 |
| United Kingdom | 3,617 | 3,408 | 3,574 | 3,221 | 2,860 | 2,860 | 2,860 |
| Romania | 3,500 | 3,000 | 3,500 | 2,400 | 2,900 | 2,700 | 2,800 |
| Switzerland | 1,077 | 1,114 | 1,196 | 1,195 | 1,150 | 1,127 | 1,161 |
| Italy | 900 | 900 | 950 | 950 | 855 | 855 | 855 |
| Netherlands | 80 | 76 | 110 | 115 | 113 | 113 | 113 |
| Total EOS | 79,535 | 79,753 | 83,175 | 79,290 | 74,822 | 72,986 | 75,289 |
| Other countries | 14,069 | 13,691 | 14,534 | 13,340 | 13,340 | 13,413 | 13,403 |
| Total Europe | 93,604 | 93,444 | 97,709 | 92,630 | 88,162 | 86,399 | 88,692 |
| USA | 59,767 | 62,733 | 63,401 | 64,308 | 63,411 | 62,143 | 62,732 |
| Canada | 41,527 | 39,190 | 40,227 | 36,411 | 31,593 | 32,500 | 32,500 |
| North America | 101,294 | 101,923 | 103,628 | 100,719 | 95,004 | 94,643 | 95,232 |
| Total | 194,899 | 195,367 | 201,337 | 193,349 | 183,166 | 181,042 | 183,924 |
Turnaround in construction in 2025
In Europe, the number of housing starts fell by 10% this year compared to 2023. Building permits were down by 2%. “However, this could indicate an inversion of trend in 2025,” Jöbstl says optimistically. Another reason for optimism is that demand for wood is stronger than what one would expect given the current situation in the construction industry. “This means that the timber construction sector is growing. In Germany, it gained 0.7% in market share. That might not sound like much, but it helps a lot.”
Market imbalance in 2024 as well
“The first half of 2024 fell short of expectations,” ETTF Vice-President Morten Bergsten commented in his market analysis. “I hope that the second half of the year will be better.” However, there is still an imbalance between production and consumption.
Despite the historic slump in German building permits, the outlook for the European construction market did improve.
The ETTF also conducted a survey among its member countries, asking them about their expectations for 2025. They want to sell 42.3 million m³ in 2025 and thus 1.1% more than this year. Bad news for Austria: Its two most important European buyers, Germany (-100,000 m³ to 15.5 million m³) and Italy (-200,000 m³ to 4.5 million m³), are the only countries which expect demand to be lower in 2025.
While the Benelux countries have seen a strong recovery, Germany is struggling with the lowest number of housing starts on record. In France, construction and renovation are leading to higher sales, while in Italy, strong GDP growth is driving sales.
Russia sanctions have to stay!
Bergsten emphasized that the all players in the timber industry have to respect the EU’s sanctions against Russian and Belarusian. He condemned imports via third countries and called on European governments to follow through on enforcing the sanctions and to close loopholes.
The three major producing countries Germany, Sweden and Finland want to increase their output by 4% in 2025.
2025 not good, but better
“2025 will not be an easy year, but members expect slight increases in imports and consumption despite some fluctuations. Therefore, we are somewhat more optimistic about next year.”
