"The situation is not likely to improve in the short term; the main problem is too little demand in Europe," he said.

The Finnish industry was performing slightly better than others in the region – helped by the euro – but, while exports had risen, those to Europe were down by 5%.

"This is compensated by exports to north Africa and the Middle East. Exports to outside Europe are now twice the size of those to Europe. This has never happened before," said Mr Selvig.

However, the situation in Sweden was "absolutely terrible". "I’ve never seen it as bad as it is now," he said. "Around eight companies have gone bankrupt this year and we will see many more."

Swedish producers were hindered by the strong krona and high log prices and, although the latter had weakened, the fall was "not even in the neighbourhood of being sufficient".

"Those who are claiming to make money, I don’t believe them," said Mr Selvig. "I don’t think anyone in Sweden is making money."

In Norway the economy was strong, with no debt, no inflation and no unemployment, but the timber industry was losing money. In addition, the pulp and paper industry was "falling apart", reducing mills’ markets for co-products.

Although prospects for the region’s timber industry for the next few years were "not very good", on a brighter note, stocks were reasonably low and a pick-up in demand next spring could raise prices, said Mr Selvig.