igns that the Irish economy is possibly getting back on its feet may be instilling some business confidence but, with construction traditionally the last sector to recover from recession, the timber industry knows it will be a while before it feels any benefit on the domestic market.

GDP grew by 0.9% last year and is forecast to expand again by 1% this year and 2% in 2014. In addition Ireland has re-entered the bond market; is expected to exit its bailout programme later this year and unemployment has fallen from 14.7% to 14% in March.

However, it’s not all good news. The government is about to introduce another round of civil service pay cuts and housing starts are still a shadow of the 93,000 units in 2007. Last year completions were around 8,500, 19% down on 2011, according to the Construction Industry Federation, and they’re expected to fall again this year.

The cold, wet winter has not helped timber sales and the first quarter was sluggish. However, as the weather has improved in the past few weeks the market has lifted, especially for those mills selling to the UK. Now they hope that the better weather will continue and kickstart projects that were put on hold.

"During the last three weeks the market has finally kicked off for the year," said one sawmiller. "Reports we’re getting from the market are that March was the worst March in history but now April is the best in history."

Second-quarter prices There has been some success in UK and Irish mills’ moves to raise prices during the second quarter, but for the latter it merely mitigates the exchange rate, and higher log prices, which have strengthened after softening over the winter.

"Prices among UK domestic producers have started to rise because log prices are rising. From the Irish guys’ perspective they’re pushing up their prices but not getting any benefit because it’s gone on currency," TTJ was told.

Another mill hoped that over the busier summer months producers could claw back the 10% lost on the C16 price over the past two years but he feared this may be stymied by nervousness among some mills that they will lose market share.

But with Swedish producers raising prices, widening the gap with home-grown to about £30-40, one contact was confident that British and Irish products were secure in the market. "The good news for home-grown is that the market continues to increase at the expense of imports," he said. "Once end users get a taste for home-grown they see it works. It’s fit for purpose, it’s up to 20% cheaper and they see the changes in quality, kiln-drying planing compared with 5-10 years ago."

While the mills supplying the UK are enjoying some market uplift, for those focused on Ireland it’s a different story. When asked for his view of the market, one contact replied: "D for disastrous or H for horrible."

The winter had severely impacted on fencing demand, particularly in the agricultural sector where farmers have had to keep stock undercover longer and so their funds have been spent on feed.

"The agricultural sector in particular is going to be a disaster this year," he said. He didn’t hold out much hope for the residential market either. Household spending would be affected by the property tax coming into effect on July 1 and the anticipation of water charges being introduced next year. "It’s going to take a good 6-9 months for people to get used to less money in their pockets so that may be the garden shed gone," he said.

Although the economy might be showing signs of recovery he believed it would take some time for that to filter through.

"I can now drive to any part of the country in two hours because there are so few lorries on the road; you couldn’t do that four years ago," he said. "Things are bad but people are getting on with it."

But whatever the state of the market, one thing preoccupying Irish mills is the proposed sale of Coillte’s harvesting rights to help pay some of Ireland’s debts. "It is by far the biggest issue facing the Irish sawmilling industry," said one sawmiller. Coillte supplies 80% of Irish mills’ raw material and there are fears that in private hands, the supply balance could be altered severely.

"Coillte is virtually a monopoly supplier and if we went to a private monopoly supplier they could be fundamentally much worse. If they decided to restrict the amount they bring to market by just 5% that could have a catastrophic effect on the sector," he said. He also questioned the economic argument for the sale.

"Coillte is valued at €600-700m and the agreement with the troika is we have to give them half the proceeds – €350m. Combined, Coillte’s debt and pension deficit is €300m so this will do nothing to sort out Ireland’s problems," he said.

The industry is lobbying the government to stop the sale or, at least, ensure some supply guarantees are in place.

While concerned about the proposed sale, one contact looked for the positives in it. "Whoever comes in isn’t going to fall out with the sawmills and may replace this antiquated [log] auction system. The industry is mounting pressure not to sell but has anyone looked at the benefits of selling?" he said.