Overall actual softwood timber market reflection (inspired by PMI outcome December)

First and foremost, I wish you all healthy new year, both personally as business wise!

The year 2023 ended negatively in terms of the PMI manufacturing outcome. Globally, it dipped by half a point (now 49,0), primarily due to the European markets (now 44,4). Negatively led by France then Germany, Austria, and the Netherlands), mainly due to the declining trend in new orders. Employment declines remain steep. Contractions in demand and purchasing cool. The least ugly was Spain.
China, Colombia, Greece, Indonesia, Mexico, the Philippines, and Russia were the only countries where growth was registered.
2023 was a volatile year. Yet, overall, the GDP figures for 2023 were more positive than initially predicted.
Interest rate hikes by central banks have definitively stopped. Partly because of an expected potential decline in interest rates, confidence in production output for the next 12 months is positive.

Especially towards the end of 2023, the balance in the timber market slightly tilted in favor of the supply side, leading to price increases. It goes without saying that this imbalance is not an issue that can be resolved quickly. In addition, cost pressure on the supplier side is still increasing.
Although it is likely that the demand for industrial goods will decrease further in the first months of 2024, a cautious recovery is still possible from the second quarter onwards.
The impact of geopolitical unrest and all its consequences (including logistics) remains uncertain. Whether this imbalance on the supply side will continue to dominate with further price increases (or even, although less likely, decreases…) is therefore unclear. There are too many scenarios to express a clear opinion on this so far.
But honestly, we are only five days into 2024…Uncertainty remains key for now.
But let me make a statement: we’re starting this brand-new year with a significantly lower price than we’ll end it with!
To be continued. Good luck to you all!

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