The Finnish forest industry is expected to experience a slow year in terms of demand for its products on the global market. This is evidenced by the decrease in production and export volumes, as well as a significant drop in export prices. A recent economic bulletin highlights the uncertainties brought about by the situation in Ukraine, inflation, energy availability, and the rise in interest rates. While export prices are falling, it is worth noting that they are doing so from a high level.
According to estimates, Finland’s production and export of lumber will decrease by 2-3 percent this year, with the export price expected to drop by around 25 percent compared to the previous year. This decline is attributed to a combination of factors, including the ongoing trade tensions between the US and China, which have had a ripple effect on the global market. Additionally, the ongoing uncertainty surrounding Brexit has also contributed to the sluggish demand for Finnish forest industry products.
Despite the challenges facing the industry, there are also opportunities for growth. For example, the demand for wood-based biofuels is expected to increase in the coming years, which could provide a much-needed boost to the sector. Additionally, there is growing interest in using wood as a sustainable building material, which could also drive demand for Finnish forest products.
One area where Finland has a competitive advantage is in the production of pulp and paper products. While demand for these products has also been affected by the global economic slowdown, the industry is expected to remain relatively stable compared to other sectors. Furthermore, the Finnish forest industry has made significant strides in recent years in terms of sustainability and environmental responsibility, which could help to differentiate its products in a crowded marketplace.
In order to remain competitive, however, the industry will need to continue to invest in innovation and technology. This includes developing new products and applications for wood-based materials, as well as improving the efficiency and sustainability of production processes. Additionally, the industry will need to adapt to changing consumer preferences and market trends, such as the growing demand for eco-friendly and sustainable products.
Overall, the Finnish forest industry is facing a challenging year ahead, with sluggish demand and declining export prices. However, there are also opportunities for growth and innovation, particularly in areas such as wood-based biofuels and sustainable building materials. By continuing to invest in technology and sustainability, the industry can position itself for long-term success in a rapidly changing global marketplace.