Finnish Forest Sector Economic Outlook 2012–2013
Finnish Forest Products Exports Hampering because of Euro Area Problems
The gloomy economic conditions prevailing in the euro area will be reflected in the 2012 and 2013 figures for the Finnish forest industry’s production and exports. In 2013, the economy and construction activity are improving in the key export markets, but the recovery is expected to be only modest.
In the wood products industry, production and exports of sawnwood and plywood will reduce in 2012 due to the impact of sluggishing construction activity in Europe and on the domestic markets. The economic outlook in Africa and Asia is rather better than in Europe, however, and Finnish exports to these regions have been growing. The fall in demand on Europe’s paper markets means that production and exports of Finnish paper as a whole will reduce as well in 2012, although the unit prices of paper exports will slightly increase. The rise in paper prices has been attributable to Europe’s production capacity cuts of recent years and production restrictions in Europe during 2012.
Towards the end of 2013, the economic performance in key export markets for the Finnish forest industry is expected to recover, as well as on the domestic markets. Production and export volumes of Finnish sawnwood and plywood are forecast to grow about 2%, and the unit prices of exports are anticipated to be up slightly in annual terms. The fall in demand on the paper markets is expected to see a turnaround during 2014, so hardly any changes are foreseen in paper export volumes and prices in 2013.
The weak state of Finnish forest industry exports is also affecting the roundwood markets, where the commercial fellings will be down in 2012, to 51 mill. m³. The decrease in commercial fellings will continue in 2013, assuming that the roundwood imports will rise to a little over 11 mill. m³ as a result of Russia’s WTO membership. In annual terms, the sawlog and pulpwood stumpage prices for 2012 will reduce from the 2011 figures, and only minor price changes are foreseen in 2013.
The forecasts assume that a dramatically deepening economic crisis in euro area will be averted. A more deep recession would entail a downward revision of all the forecasts in this Economic Outlook.
The Economic Outlook is a translation of an abbreviated version of the Finnish original and is based on the information available in early October.
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