Forest Sector Outlook – September 2023 Quarter

The September 2023 quarter edition of the Forest Sector Outlook was released in October 2023 by the Global Consulting Alliance. This report continues to highlight the impact of the ongoing Russia/Ukraine war on the global forest sector. It also considers the impact of rising interest rates and the slowdown of global economic growth on global forest products trade.

Key highlights for China/Asia

– Factories in China reported their first expansion in activity in September, providing a spark of optimism for the global economy. The nation’s manufacturing sector’s Purchasing Managers Index (PMI) rose to 50.2, signaling expansion. Similarly, the non-manufacturing sector saw growth, boosted by consumer spending on services and increased construction activity.

– The real estate market continues to face a downturn, with new home sales at major developers falling 29% in September compared to the previous year. China Evergrande Group, a major developer, faces financial troubles and regulatory hurdles, adding uncertainty to the sector. Country Garden is even bigger and it has some financial issues as well.

– China’s exports are shrinking, and tensions with the US-led West over trade and technology remain. Local governments are burdened with heavy debts. Economists suggest that Beijing needs to implement more stimulus measures to ensure a stronger and more durable recovery.

– Looking ahead, economists anticipate a challenging transitional period for China’s economy as the government aims to shift from a property-driven growth model to one fueled by advanced manufacturing. Most economist groups have lowered their economic growth forecasts for 2023 to around 5.0%, highlighting the need for successful rebalancing to establish a healthier economic footing. – China’s softwood log imports were lower for the first eight months in 2023 by 7.9% at 20.5 million m3 compared to the same period one year ago.

Top 5 suppliers to China/Asia were:

– New Zealand 11.5 million m3 +2.2%
– Germany 2.5 million m3 -34.5%
– Japan 877 000 m3 +16.6%
– USA 857 000 m3 +5.8%
– Poland 739 000 m3 +208%

The Forest Sector Outlook covers regional market updates from Australia, New Zealand, China/Asia, Europe, Russia, North America, South America and Africa.

Source: Margules Groome


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