The Austrian timber industry reports continuing testing trading conditions in domestic and some export markets. It is also having to increase raw material imports due to underperforming domestic supply.

However, the sector is in increasingly positive mood. Output and overall exports have recovered in the last two years, following a dip in 2013/14. The Austrians also remain among European timber sector front-runners in investment in research, development, education and marketing, with these funded via an obligatory €0.30/m3 levy on mills and voluntary contributions from foresters on domestic roundwood sales.

The timber-based construction sector continues to evolve too, increasing sales at home and abroad. It is also soon to have a new flagship structure to underline its capabilities in Vienna’s much-heralded, 24-storey HoHo block. Construction has started and it’s set for completion and the title of world’s highest residential wood building in 2018. Opening the Austrian Timber Industry Association’s (FV Holzindustrie/FVH) 2015/16 annual report, director Dr Erich Wiesner said the sector’s turnover increase against the previous 12 months was flattered by the 2014 downturn.

“Reflecting wider economic challenges, employee numbers also fell 1,000 to 25,484,” he added.

However, he still welcomed 2015’s 4.84% sales rise of the wider industry, comprising soft and hardwood, sheet materials and wood products, to €7.49bn and the 2.4% increase in exports to €4.96bn, the _ rst since 2012. This lifted the sector’s trade balance 5.6% to €1.23bn, despite a 1.4% increase in imports, largely of raw material to €3.74bn.

Strength in Softwoods

Around 74% of exports went to other EU countries, with Italy remaining easily Austria’s biggest customer thanks to its sawn softwood imports. These slipped from 2.4 million m3 to 2.38 million m3 in 2015. But the volume decline was attributed to migration to higher value-added manufactured goods sales, notably prefabricated wall and ceiling systems, and the market still accounted for nearly 50% of Austria’s total softwood exports. The performance also represented continuing turn around from the recession years when Italian purchases halved.

Germany consolidated its position as Austria’s second biggest sawn softwood market, with its wider economic recovery and, particularly, improving construction sector, boosting purchases 8% to 741,000m3. Japan comes next, with 2015 Austrian imports of 325,000m3, although the FVH groups north African and Middle East, or Levant countries together. Technically this put them third, with purchases of 919,000m3.

The UK is seen as a more signi_ cant potential market for added-value Austrian engineered wood construction products and systems, produced by growing numbers of the larger mills. In fact a further shift to these, plus tough competition from Nordic and Baltic suppliers, was given as reason for UK Austrian sawn softwoods imports dropping 28.9% to 46,900m3 in 2015.

2016 prospects

Figures for 2016 are still preliminary, but early analysis suggests the Austrian softwood industry remains on a gradual upward curve. “The domestic market continues to develop slowly but positively. Germany is keeping the sales engine running and exchange rates have helped increase business in Japan,” stated a September FVH news update. “Difficult conditions in the Levant hit sales, but it remains a valued sawn timber market.”

The overall statistics mean Austria remains 10th biggest sawn softwood producer worldwide, with output of 8.7 million m3 last year, and sixth international trader, with 2015 exports of 5.04 million m3. “And that’s an achievement given that timber sector in total comprises just 1,350 companies,” said Dr Wiesner, “And most of our 1,050 sawmills are also small to medium-sized, with 90% of output from 40 businesses.”

By contrast, Austria’s hardwood sector has had a tough couple of years, with sawn output slipping to 149,000m3 in 2014, then 136,000m3 last year. Exports fell 3% to 123,000m3, worth €74m. FVH attributes this to contracting demand, plus poor Central European oak supply. More recently, however, it reports improving market conditions and log availability, with demand up abroad and at home and particularly good sales to the rail industry.

According to Austrian panel products sector spokesperson Dr Erlfried Taurer, this industry was forced to restructure and downsize in the recession, but has now achieved ‘stability in a still difficult market’. “We have had to be flexible on price, particularly with main consumers in construction and furniture, and that has hit earnings,” he said. But our trade surplus was still €700m, with industry output around 2.15 million m3, 80% of which was exported.’

Development projects

“Overall our timber sector is still among Austria’s 17 key industries and, despite recent redundancies, one of its biggest employers, also supporting an average 700 apprentices,” said Dr Wiesner. “And, although improvement has been slow, we’re clearly past the economic downturn and positioned to strengthen our position further.”

The latter, he added, will be achieved both through capitalising on generally improving market conditions, and sector-wide cooperation and development initiatives.

One area where industry action is focused is mobilisation of smaller-scale forest log supply. This year Austria’s harvest was further depressed by spring rain, but sawmillers’ real concern is smaller owners’ reluctance or poor realisation of the need to manage woodlands for timber.

Mobilising wood supply

Large-scale private and state forests could also increase output, said FVH chairman Herbert Jöbstl. But small estates are the heart of the problem, leaving national log output at just 50% of capacity.

“Austria’s standing timber resource is 1.2 billion m3, 20% more than in 1996 and we could utilise significantly more without adverse environmental or social impacts,” he said. “Our harvest target is 22 million m3, but we’re still 25% off. Consequently our modern, productive sawmills are at 66% capacity and we’re losing market share to northern Europe and America. Our aim is to convince owners that a healthy forest that contributes most in climate and wider environmental, as well as economic benefits, is a managed forest.”

The problem, he added, was reflected in 2015’s softwood log import rise, with all key suppliers benefiting; the Czech Republic providing 1.92 million m3, Germany 1.7 million m3, Slovenia, 900,000m3, Slovakia 233,500m3, Italy 218,400m3 and Switzerland, 133,780m3.

FVH has now formed a working group to tackle the issue. One focus is logistics, to make it easier and cheaper for forest owners to get logs to the mill. Material flow analysis is also assessing where timber mobilisation is worst and a communications drive is highlighting that small-scale owners are an integral part of the ‘bioeconomics’ sector. The industry is also not resting on its laurels as a leader in timber building.

According to latest figures from wood sector marketing organisation proHolz, timber construction accounted for 43% of new build developments in Austria overall and 23% in Vienna in 2015. That compared to 25% and 17% respectively in 2008. But proHolz wants to push those percentages higher. Its has a trade and consumer promotional campaign highlighting the environmental and performance benefits of building with wood. It also acts as the foreign ambassador for the sector, with its WoodBox mobile wood building exhibition touring cities Europe-wide and now entering its third year on the road.

Industry development projects are set to evolve too, with additional funds available through a new voluntary levy scheme for sawn wood importers, industrial wood processors and roundwood exporters.