The results of the Holzkurier’s economic survey carried out among sawmill companies show that the economic situation remained weak in the third quarter as well. Survey participants are still pessimistic. Only 11% of them described their business situation of the past three months as good. 52% of respondents reported a satisfactory and 37% a bad business situation. Thus, there has been virtually no change compared to the Q2 survey. The same is true for the outlook for the next three months: Only 12% of sawmillers believe in a positive development of their business situation, while 48% expect a deterioration.
High log prices and rising lumber prices expected
A major cause for concern among Austrian and German sawmills is the development of raw material costs. 41% of companies expect log prices to rise in the coming three months, while 52% think that they will remain constant. Only 7% believe that log prices will fall. A more positive outlook can be observed when it comes to the development of lumber prices, although it has to be said that this improvement started out from a low level. In the Q2 survey, 20% of the sawmills expected lumber price to rise. In the current survey, that percentage has gone up to 50%. 39% of respondents believe that lumber prices will remain constant, and 11% think that they will fall in the coming three-month period.
As for sales, only 8% of the surveyed sawmills reported strong sales in the past quarter. 57% described them as satisfactory and 35% as weak. Expectations regarding sales in the next three months are more negative than they were in the Q2 survey. 34% of respondents expect a decrease in sales (Q2: 24%), 54% assume that their sales will remain unchanged (Q2: 62%), and only 12% think that they will generate higher sales (Q2: 14%).
EUDR, staffing, raw material, sales
As for many other industries and sectors, the shortage of (skilled) workers and finding qualified staff remains one of the biggest challenges for Austrian and German sawmills. Survey respondents are also worried about the coming into force of the EUDR. However, it became known only after the survey had been closed that the EU Commission is currently negotiating the regulation’s postponement by one year. In addition, German and Austrian associations demand an easing of the strict norms for regions which have demonstrably stable forested areas. In addition to fresh log wood being in short supply, high material costs and the weak sales markets were also mentioned as challenges.
Biggest challenges at the moment *
Staffing:
- Lack of skilled workers, difficulty in finding and keeping qualified staff
- Finding replacements for retiring employees
- Shortage of skilled workers due to bureaucracy and resistance to automation
- High wages as a result of the lack of skilled workers
- Burden on human resources due to bureaucracy
- Rising wage costs due to the shortage of skilled workers
Purchasing of log wood:
- Lack of fresh log wood, difficulties in procuring log wood
- Rising log prices
- Difficult structure of log and lumber prices
- Expectations of forest owners have to be met in order to get sufficient raw material
- Rising prices as a result of the lack of log wood
- Problems in procuring larch logs
- Beginning shortage of raw material
Lumber sales:
- Weak demand for lumber
- Too low prices for lumber and solid structural timber (KVH)
- Difficult adaptation of lumber prices to rising log prices
- Pressure on margins and low sales revenues
- Negative economic outlook, especially in the construction industry
- Sales problems and stagnating or falling lumber prices
- Decreasing sales and negative sentiment on the market
EU Deforestation regulation:
- EUDR causes uncertainty and additional red tape
- Companies feel helpless when it comes to political framework conditions
- Unclear impact of the EUDR
Other:
- High energy costs and long-term contracts have a negative impact on the cost structure
- Strong increase in bureaucracy due to national and European regulations
- High logistics costs and underestimation of byproducts
- Weak automotive industry negatively impacts the production of single-use container pallets
- Political uncertainty and ineffective political discussions
- Challenging economic situation in the construction industry leads to low order intake for certain products
- Rising energy costs, norms and regulations as a burden
* Answers to the question: What are the biggest challenges you are currently faced with and how do you handle them?
