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Report from
Europe
Unexpected rise in EU27 tropical timber imports in
November
Total EU27 (i.e. excluding the UK) import value of
tropical wood and wood furniture products was US$2.75
billion between January and November last year, 10% less
than the same period in 2019. This is a significantly higher
level of import than forecast earlier in the year when the
first waves of the COVID-19 pandemic hit the continent.
Total import value in November was US$263 million, a
4% gain on the previous month and 6% more than the
same month in 2019 (Chart 1).
The high level of EU27 tropical wood product imports in
November is encouraging and was unexpected as it
coincided with signs of severe stress in the EU market in
the last quarter of 2020. According to the EU¡¯s Winter
2021 Economic Forecast published on 11th February,
GDP in the EU increased by 11.5% in the third quarter of
2020 before contracting by 0.5% in the fourth quarter as
the second wave of the pandemic triggered renewed
containment measures. According to the Forecast, EUwide
GDP is estimated to have declined 6.3% in 2020.
The Forecast notes that ¡°Europe remains in the grip of the
coronavirus pandemic. The resurgence in the number of
cases, together with the appearance of new, more
contagious strains of the coronavirus, have forced many
Member States to reintroduce or tighten containment
measures¡±.
According to the latest data from the Oxford ¡°stringency
index¡±, which records the strictness of ¡®lockdown style¡¯
policies to limit the spread of COVID-19, in mid-February
strict lockdown conditions were still in place throughout
most of Europe. These measures are now expected to be in
force in many European countries at least until mid-
March.
According to the EU Winter forecast, the EU economy is
expected to contract in the first quarter of 2021 but
economic growth should resume in the spring and gather
momentum in the summer as vaccination programmes
progress and containment measures gradually ease. An
improved outlook for the global economy is also set to
support the recovery. The EU economy is projected to
grow by 3.7% in 2021 and 3.9% in 2022.
The economic impact of the pandemic remains uneven
across Member States and the speed of the recovery is also
projected to vary significantly (see GDP chart below). In
Germany, the EU¡¯s largest economy, GDP declined 5% in
2020 and is projected to increase 3.2% in 2021 and 3.1%
in 2022. The depth of economic decline and speed of
recovery is projected to be greater in several EU countries
including France, Spain and Belgium.
Italy, which suffered a particularly sharp decline in GDP
in 2020, is expected to recover more slowly than all other
EU countries. In contrast, the fall in GDP in the
Netherlands in 2020 was less severe than in other western
European countries and the recovery in 2021 and 2022 is
also expected to be stronger.
The EU Winter Forecast notes that ¡°risks are more
balanced since the autumn, though they remain high. They
are mainly related to the evolution of the pandemic and the
success of vaccination campaigns. Positive risks are linked
to the possibility that the vaccination process leads to a
faster-than-expected easing of containment measures and
therefore an earlier and stronger recovery¡±.
It goes on to suggest that ¡°NextGenerationEU, the EU's
recovery instrument of which the centrepiece is the
Recovery and Resilience Facility (RRF), could fuel
stronger growth than projected, since the envisaged
funding has - for the most part - not yet been incorporated
into this forecast¡±.
On the downside, ¡°the pandemic could prove more
persistent or severe in the near-term than assumed in this
forecast, or there could be delays in the roll-out of
vaccination programmes. This could delay the easing of
containment measures, which would in turn affect the
timing and strength of the expected recovery. There is also
a risk that the crisis could leave deeper scars in the EU's
economic and social fabric, notably through widespread
bankruptcies and job losses. This would also hurt the
financial sector, increase long-term unemployment and
worsen inequalities¡±.
Forward looking indicators show that economic
momentum in the EU27 is unlikely to increase in the first
quarter of 2021. The IHS Markit Eurozone Composite
Purchasing Managers Index (PMI) declined from 49.1 in
December to 47.8 in January. Any score below 50
indicates that a majority of those surveyed recorded a
decline in purchasing during the month.
Services were the principal drag on economic output, with
activity here falling for a fifth successive month in
January. Manufacturing remained the principal bright spot
of eurozone economic performance, expanding for a
seventh successive month in December, albeit at the
lowest rate in this growth sequence.
The latest PMI data for eurozone construction activity is
also not encouraging, falling from 45.5 in December to
44.1 in January, to signal a sharp and accelerated decline
in eurozone construction activity. Notably, the rate of
contraction was the quickest recorded since last May and
stretched the current sequence of reduction to 11 months.
Underlying data signalled reduced construction output
across each of the three sub-sectors monitored by IHS
Markit; housing, commercial and civil engineering. At the
national level, German and French firms reported further
declines in construction activity, with the latter recording
the sharpest contraction since last May. Moreover, Italian
firms signalled a renewed, albeit marginal decline in
activity in January.
That said, according to IHS Markit, construction firms in
the eurozone appeared optimistic regarding the outlook for
activity over the coming 12 months. Confidence turned
positive for the first time since July 2020, as hopes for a
broad recovery in the construction sector were
underpinned by positive vaccine news.
Rebound in EU27 tropical wood product imports
gathered pace in November
Unsurprisingly, EU27 imports of all the main tropical
wood products fell in the first eleven months of 2020, but
in each case the decline was less dramatic than expected
earlier in the year when the scale of the pandemic and
associated lockdown measures was just becoming
apparent. The recovery in imports also strengthened in
November for all product groups and in all EU countries,
with the exception of Italy.
In the year to November, EU27 import value of wood
furniture from tropical countries declined 7% to US$1080
million, while import value of tropical sawnwood declined
14% to US$608 million, tropical mouldings were down
16% to US$241 million, veneer down 10% to US$165
million, joinery down 16% to US$157 million, plywood
down 16% to US$133 million, marquetry and ornaments
down 13% to US$63 million, and logs down 22% to
US$40 million. Import value of tropical flooring actually
increased slightly, up 4% to US$57 million (Chart 2).
Import values fell into all six of the largest EU27
destinations for tropical wood and wood furniture products
in the first eleven months of the year. Import value was
down 13% to US$557 million in the Netherlands, 10% in
France to US$519 million, 10% in Germany to US$427
million, 6% in Belgium to US$420 million, 17% in Italy to
US$203 million, and 14% in Spain to US$139 million.
However, import value increased in Denmark, by 21% to
US$125 million, and in Poland, by 15% to US$71 million.
Import value in Sweden declined, but by only 5% to
US$58 million (Chart 3).
EU27 wood furniture imports from Vietnam close to
last year¡¯s level
In the furniture sector in 2020, EU27 import value from
Vietnam almost matched the previous years¡¯ level in the
first eleven months, down only 2% to US$446 million.
Imports from Indonesia were down 9% to US293 million
in the first eleven months of 2020, although this compares
with a relatively strong performance in 2019 and imports
were still higher than in the same period during 2018
(Chart 4).
EU27 imports of wood furniture declined sharply from
Malaysia and Thailand in the first eleven months of 2020,
respectively down 14% to US$89 million and 21% to
US$30 million. However imports from the Philippines
increased 5% to US$6.4 million.
EU27 imports of wood furniture from India were down
8% to US$210 million in the first eleven months of 2020.
Partly due to supply side issues, imports from furniture
from India almost came to a complete halt in May last year
but rebounded very strongly in the second half of 2020
when they were at record levels for that time of year.
EU27 tropical sawnwood imports fall 16%
In quantity terms, EU27 imports of tropical sawnwood
declined 16% to 726,200 cu.m in the first eleven months
of 2020. Imports fell sharply from all major supply
countries; down 18% from Cameroon to 257,700 cu.m,
13% from Brazil to 116,000 cu.m, 13% from Gabon to
94,700 cu.m, 13% from Malaysia to 85,100 cu.m, 18%
from Congo to 45,600 cu.m, 28% from Côte d'Ivoire to
23,300 cu.m, and 22% from Ghana to 17,700 cu.m.
However Ecuador bucked the downward trend, with EU27
imports of sawnwood from the country rising 10% to
23,900 cu.m, much destined for Denmark and driven by
booming demand for balsa for wind turbines. Imports of
sawnwood from Indonesia also increased slightly, by 14%
to 8,130 cu.m, but this follows a 66% reduction in 2018
(Chart 5).
The decline in imports of tropical sawnwood in the first
eleven months of 2020 was mirrored by a similar decline
in EU27 imports of tropical mouldings/decking.
Imports of this commodity were down 8% overall at
156,800 tonnes, falling 6% from Brazil to 68,600 tonnes,
4% from Indonesia to 52,100 tonnes, 14% from Peru to
8,900 tonnes, 14% from Malaysia to 7,200 tonnes, 30%
from Gabon to 5,300 tonnes, and 25% from Bolivia to
4,800 tonnes (Chart 6).
EU27 imports of tropical logs were down 23% to 78,700
cu.m in the first eleven months of last year. (Chart 7)
Imports held up reasonably well from the Republic of
Congo, down only 10% to 31,000 cu.m, but fell sharply
from all other leading African supply countries including
Cameroon (-31% to 10,800 cu.m), Central African
Republic (-36% to 11,800 cu.m), DRC (-44% to 7,000
cu.m), and Liberia (-25% to 5,900 cu.m).
However, there was a significant in imports from two
smaller suppliers in South America; Paraguay (+347% to
4,100 cu.m) and Guyana (+38% to 2,200 cu.m).
EU27 tropical veneer imports from Gabon on the rise
despite pandemic
EU27 imports of tropical veneer declined 8% to 256,200
cu.m in the first eleven months of 2020. Imports from
Gabon bucked the wider downward trend, the EU27
importing 148,800 cu.m from the country between January
and November last year, 18% more than the same period
in 2019, mainly destined for France.
Veneer imports declined from all other major tropical
suppliers, including Côte d'Ivoire (-24% to 50,800 cu.m),
Cameroon (-36% to 23,500 cu.m), Equatorial Guinea (-
15% to 9,200 cu.m), Ghana (-20% to 6,500 cu.m),
Indonesia (-26% to 4,200 cu.m) and DRC (-62% to 1,900
cu.m). (Chart 8).
Although there were signs of an uptick in the pace of
EU27 imports of tropical hardwood faced plywood
between September and November last year, total imports
of 223,600 cu.m in the first eleven months were still down
15% compared to the same period in 2019.
Imports fell from all the leading supply countries
including Indonesia (-15% to 71,400 cu.m), China (-9% to
68,000 cu.m), Gabon (-5% to 25,000 cu.m), Vietnam (-
15% to 12,600 cu.m), Morocco (-7% to 10,100 cu.m) and
Brazil (-35% to 7,900 cu.m). EU27 imports of tropical
hardwood faced plywood from the UK ¨C a re-export since
the UK has no plywood manufacturing capacity - declined
39% to 10,800 cu.m (Chart 9).
EU27 tropical flooring imports rise while other joinery
imports decline
Given the situation in the wider market, one of the least
expected trends in EU27 import data was a slight recovery
in imports of tropical flooring products in the first eleven
months of last year. (Chart 10)
This follows a long period of continuous decline. Imports
increased 5% to 22,400 tonnes, with the gain due to a 35%
rise in imports from Malaysia to 8,200 tonnes, mostly
destined for Belgium. Imports from Indonesia increased
slightly, by 5% to 5,600 tonnes and declined moderately
from Brazil, down 6% to 4,800 tonnes. Imports from
Vietnam fell more rapidly, by 23% to 2,100 cu.m.
EU27 import quantity of other joinery products from
tropical countries, which mainly comprise laminated
window scantlings, kitchen tops and wood doors, declined
16% to 157,000 tonnes in the first eleven months of 2020.
Imports were down 22% to 79,600 tonnes from Indonesia,
11% to 49,600 tonnes from Malaysia, and 40% to 1,500
tonnes from Ghana. However imports increased by 1% to
15,100 tonnes from Vietnam and by 18% to 3,200 tonnes
from the Republic of Congo. (Chart 11).
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