Demand for wood starting to recover in Europe and North America – UN

By United Nations
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Consumption of forest products across Europe and North America is on the rise again after a two-year slump, the United Nations reported today, noting that overall demand was up by 5.6 per cent last year, a clear indication that the industry may be on a path to recovery.

Trends in the first half of this year lend support to a continued, albeit modest, rise in consumption, according to the Forest Products Annual Market Review 2010-2011 prepared by the UN Economic Commission for Europe (UNECE) and the UN Food and Agriculture Organization (FAO).

There were small differences in consumption growth in the UNECE region, which includes North America. Consumption rose by 4.1 per cent in North America and by 6.6 per cent in Europe. In the Commonwealth of Independent States (CIS) growth in consumption was up 6.3 per cent.

Production also rose in tandem with increasing consumption, with industrial roundwood (the raw material for processing and manufacture) climbing to 950 million cubic metres, eight per cent higher than in 2009, but still 15 per cent below the 2006 peak production year.

As the main driver for forest products markets, especially for sawn softwood (lumber) and wood-based panels, housing construction is a key indicator of likely demand and production.

After the decline in new construction registered since the 2006 peak, data for last year indicated a small recovery in both Europe and North America. It is uncertain if this trend will continue, though data for the first half of this year show a steady rise in house construction.

In the United States, data released on 19 July by the US Census Bureau show that building permits in June were at a seasonally adjusted annual rate of 624,000 or 2.5 per cent above the revised May rate of 609,000, and 6.7 per cent above the June 2010 estimate of 585,000.

In sharp contrast to the previous two years, all wood product sectors in the UNECE region have witnessed a recovery in demand, including sawnwood (up by 8.3 per cent), wood-based panels (4.8 per cent), and paper and paperboard (4.2 per cent).

The paper and paperboard sector showed good recovery last year in almost all categories in all the three sub-regions of UNECE, according to the report.

After several years of decline, production of newsprint increased by 10 per cent in Europe last year, compared with 2009. Even in the US, where the decline in newsprint has been steepest, with consumption in 2010 only one-third of what it was in 2005, consumption has flattened out.

The forest sector, which already makes a significant contribution to the green economy, needs to redouble efforts to market itself more effectively to ensure that wood shakes off its old-fashioned image and be seen as a modern material that combines beauty and durability and has one of the lowest carbon footprints of any major raw material, according to the report.