As the year draws to a close the noises being made in the Irish timber trade are that 2003 has been mostly good for business.

Apart from a seasonal slowdown in July and August, business has reportedly been active and construction remains buoyant. The strong performance of the housing market has, of course, been important but some commentators have raised the spectre that it could see a collapse.

The forestry industry will be keeping a close eye on the government’s book of estimates, due out at the end of November, to assess the funding provision for planting programmes. Last time around forestry suffered heavy cuts.

But, according to media reports, budget pressures on the government may be easing due to economic recovery helping tax revenues, which were up 4.3% in the first 10 months of 2003. And analysts say there are fewer consumer fears about the state of the economy.

Unemployment levels dropped by 2.5% during October to 4.4% and the Department of Finance estimates inflation will average 3.6% this year.

One merchant reports that African hardwood and other tropical timber is drying up, in terms of both supply and demand, with the right dimensions hard to source. However, he said other products were creating interest on the market, including laminated pine joinery.

And there is good news on the subject of quality control. The black hole which followed the winding up of the Timber Quality Bureau of Ireland has now been filled by National Standards Authority of Ireland. “That’s good news,” according to a merchant, who said there were examples of wet timber or “not fit for purpose” products being sold.

Exchange rates

Swedish producers are not having a great time in the Irish market, due to exchange rates. Irish companies are still paying the market price but the rate of the krona is eating into the Swedes’ profits. Baltic timber imports seem to be holding strong.

On the domestic supply side, Coillte says 50,000m3 more timber has been contracted than a year ago – 1.909 million m3 compared with 1.857million m3.

A spokesperson said: “This year the sawmills are certainly doing more business with private growers and some is being imported from Scotland. Private growers were coming into the situation in the early part of this year.”

He said demand had been high in some parts of the country and some sawmillers had found themselves slightly light on stock as a result.

Coillte aims to meet its production commitment for 2003 but admits it will be tight. Last year it brought an extra 100,000m3 into the market (from future years’ provision), something it cannot do again this year.

The spokesperson admitted it was “probably true” that there were not enough logs to meet the new capacity of the sawmilling industry. However, he said there were more of the prized large sawlogs this year, with still more expected in 2004.

&#8220Timber frame had a 20% market share in the Irish new housing market in 2002, with 8,972 units built. The projected output this year is 11,232 units”

A factor exacerbating the supply issue is some mills buying volume in areas they do not normally purchase from.

Coillte is still promoting use of non-spruce species and says 3.7m-long, large diameter pine saw logs are being used for decking and a shorter length second grade pine product is being milled for fencing.

But, with demand for pulp so high, the shorter lengths are invariably being used in this market instead.

However, the supply issue with the sawmillers is still rumbling on. Having invested in extra capacity, many mills are unhappy about Coillte’s log estimates.

One source said: “The market side of it is holding up but our big worry is the logs.”

He said his mill would not be able to move to a double shift for the foreseeable future – “certainly for years”.

But he took solace in the fact that the Swedish currency has swung in the favour of domestic timber.

OSB demand

On the panels front, SmartPly has experienced good demand for its OSB in the US, where prices have recently reached record levels. Demand and pricing in its European market has not been so strong.

Timber frame is continuing to make inroads in the housing market. Members of the Irish Timber Frame Manufacturers’ Association (ITFMA) are currently producing more than 8,000 units a year.

According to the latest figures, timber frame had a 20% market share in the Irish new housing market in 2002, with 8,972 units built. The projected output this year is 11,232 units, with the industry’s potential capacity at about 13,665.

This is so far being achieved with little background marketing support.

And the Canadians have seen the potential – Canada Mortgage and Housing Corporation invited ITFMA members to a training seminar on Canadian timber technology in Dublin on November 7. Topics included best practices in heating and ventilation, insulation, moisture control, indoor air quality and energy conservation.

However, while all this may seem like good news for timber, some merchants have expressed fears that it actually reduces their market as they sell mainly into the traditional brick/block housing market and not the systems approach and bulk-buying favoured by timber frame manufacturers.