• Sweden’s harvest will fall 3% in 2012.
• The strong krona hit 2010 timber exports.
• The timber sector’s 2012 outlook is uncertain internationally and at home.

From 2012-2015 Sweden will spend SKr20m (£1.8m) a year on creating forest industry jobs. It’s a sign of the economic and timber sector times.

The country came through the 2008/09 global downturn relatively unscathed, but renewed international economic weakness is taking its toll and the 2012 GDP growth forecast has been cut to 1.9%. At the same time, unemployment is expected to rise from the current 6.8% to 7.5% in 2012 – hence job creation measures.

Back in 2009/10, the Swedish forestry sector was recovering even more strongly than the wider economy, driven by rising domestic and export demand. The sawlog harvest consequently increased 19% to 35.6 million m³.

After a reasonable start in 2011, however, deteriorating market conditions began to impact and the harvest is now predicted to be down 3% over the year. A recovery to 36.2 million m³ is forecast for 2012, but only if there is improvement in Swedish and wider European construction markets, something now thought to be increasingly unlikely. Sawlog imports, consequently, are also forecast to show a fall for 2011 of around 14% to 500,000m³.

Hampered by the strong krona, the Swedish sawn timber sector continued to find the going tough in 2010, with a 14% rise to 5.6 million m³ in domestic deliveries offset by a 7% fall in exports to 11.4 million m³. Oversupply also became an issue and production curbs kicked in at the end of the year, into 2011.

This year saw a stronger performance overall, with sawn exports up 4% in the first half but, again, the worsening international picture has started to bite and June exports year on year were 14% lower.

The Swedish panel sector also found the going tough through 2010/11. The strong krona helped depress exports 13% to 68,000m³ and at the same time sucked in plywood, MDF and chipboard imports (up 25%, 30% and 53% respectively). The forecast for this year is further declines in both export and domestic sales – and manufacturers fear growing competition for raw material from the booming Swedish renewable heat and power sector too. Sweden already derives 32% of its energy from biomass and has to import 20% of its wood pellet requirements and government targets to reduce greenhouse gas emissions by another

2 million tonnes by 2020 are expected to spark a further surge in woodfuel consumption.

On a brighter note, the Swedish timber construction sector is forecast to rise, literally, with growing demand for multi-dwelling, multi-storey buildings. After a difficult 2009/10, the market improved in the first half of 2011. A total of 13,700 wood properties were built, with multi-dwelling building up 8% to 9,550.

The Swedish timber industry also has access to more certified raw material. A total of 11.2 million ha of forest, 49% of the country’s total, is now FSC certified and 8.4 million ha PEFC certified – and both figures are set to rise.

And looking beyond the current ecnomic turbulence there is still underlying conviction that Sweden will remain a powerhouse in the international forest products market. More than this, the government wants it be a global model of ecologically and socially-responsible profitability. Hence, its SKr150m research programme into forest sector sustainability strategies, with “co-equal objectives of environment and production”. The vision, said rural affairs minister Eskil Erlandsson, is a “forest kingdom with values for the world”.

Figures from the UNECE and Swedish Forest Industries Federation.