submitted by the Delegation of Germany
to the fifty-seventh session of the ECE Timber Committee
Geneva, 27 to 30 September 1999
A. General information
According to this, the real GDP growth of approx. 1 ½ % is relatively moderate on an annual average in 1999. If the economic recovery continues, a real GDP growth of around 2½ % could be reached next year, without price stability being at risk in the entire projection period.
2. Economic growth will probably be driven particularly by domestic demand, whose development is still positive, primarily that of private consumption. Thus, the prospects for a greater willingness to invest are also favourable. Investment activity is supported by the improved domestic sales prospects and by the nominal interest level, which will probably stay low, as well as by the positive earnings performance of the past few years.
In all probability the stronger global economic expansion, first signs of which have already emerged since the beginning of this year, will also give positive impulses to the German economy. Meanwhile there are increasing signs for a gradual brightening again of the world economic environment. Foreign trade is therefore likely to buttress again the overall economic dynamic in the further course of this year.
3. The positive trend on the labour market temporarily slackened as
a result of the slowdown in growth of the gross domestic product in the
last winter half of the year. The latest seasonally- adjusted growth of
the unemployment rate, however, is rather due to the decline in the relief
effect exerted by the labour market policy. Marked growth in employment
can only be expected in the course of next year.
In 1998, the German timber industry benefited from a growth in private consumption and slightly surpassed the turnover of the previous year with 86 billion € (1.7%). However, the development of turnover varied widely according to the different branches: while there have been marked increases in turnover in wood working, the furniture industry as well as the pulp and paper industries, sales declined in the craft trades and the other fields of the wood processing sector. With around 61,000 the number of enterprises as well was slightly higher than in the previous year
The slight economic recovery did not yield any impulses on the labour market though. The number of persons employed declined in 1998, falling short of the previous year�s level by 2.3 %.
There have been manpower cuts in all of the other branches examined here with the exception of timber wholesale trade.
In the first half of 1999 turnover als well as employment have been decreasing. The wood-based panel industry as well as the manufacturers of construction elements recorded particularly sharp falls. Overall turnover in the timber and furniture industries decreased by 2.5% as against the same period in the previous year. The number of enterprises fell too. Foreign trade, which clearly increased in 1998 as well, is expected to give stimulating impulses. A slight improvement is forecast for the course of the year, which according to the trade associations will suffice at best to compensate for the negative result of the first half, however.
Construction
The share of the construction industry in the overall economic real output has been decreasing for the past decades. The construction industry forfeited its role as the engine of overall economic development increasingly losing shares in the gross domestic product.
Real investment in construction again declined in 1998. The decline was higher than in the previous year and far more pronounced in the new Laender than in the old Laender. Within the three main branches of building industies (housing construction, commercial buildings and public buildings) housing construction fared best. In the process, it must be considered that housing construction representing the main branch for the growing use of timber has the highest share in production volume among these branches.
The construction of one- and two-family homes increased considerably. Low mortgage interest rates as well as the price decline in construction services contributed to this. Construction services for maintenance and repair of dwellings claim a further increasing share, accounting for almost 50% now of the housing construction volume, and also playing a key role for the use of timber.
Apart from the general construction activity, in 1998 the number of approved dwellings was also lower than in the previous year. The decrease in permits in the construction of multiple dwelling units was particularly dramatic, whereas the approvals in one- and two-family home construction increased substantically here, too.
The construction of timber houses showed a marked increase again. According to a study, in 1998 around 30, 000 houses were built with timber as a building material. This represents an increase of almost 30% compared with 1997. The increase in the timber house construction of the carpentry trade was particularly pronounced. Here the market volume of 500 units in 1990 rose to around 14, 000 in 1998.
Regarding the further prospects, the industry expects for 1999 an end to the downturn at least in the old Laender and an increase again in the average construction activity of the three branches. The following indicators are mentioned in this context:
Promotion of wood utilization and prospects
The new Wood Sales Fund Act is designed to strengthen the renewable and environmentally friendly resource and material timber in the competition with other materials and to improve the economic situation of small-and medium-sized enterprises of the forestry and wood-based industries. The new Act has been in force since 1 January 1999. Through strengthening of the financial base of the Wood Sales Fund (former Forestry Sales Fund) by including sawmills, veneer mills and plywood mills in the financing as well as by improving its organization, the above-mentioned aims should be pursued more effectively.
One of the measures of the Wood Sales Fund is to illustrate the compatibility of sustainable timber use with the requirements of the protection and recreational functions of forests by explaining the management of the German forest industry, inter alia. By presenting the ecological benefits of timber convincingly, its position is to be strengthened in the competition with other materials than wood.
With the new �Investment Program for Renewable Energy Sources 1999 � 2003", the Federal Government is stepping up the promotion of energy use of wood, inter alia. For 1999 up to 35 million € have been earmarked for �biomass" within the framework of the program (all renewables together up to 100 million €).
A new Ordinance on Energy Savings is under way to tighten the requirements regarding thermal insulation in buildings. The low-energy housing standard thus called for is compatible with timber construction and will probably further improve the competitive situation of timber as a construction material.
There is no telling now what effects the measures taken by the Federal Government will have on the whole sector, in particular in the field of energy savings. It can be assumed however, that manufacturers of wooden construction elements and the interior finishing industry will benefit particularly from the implementation of this ordinance.
The Federal Building Ministry expects in the construction industry a weakened continuation of the downswing of the housing construction activity, with the field of single-family home construction, which is important for the use of timber, still being the most stable one. In total, around 440, 000-460, 000 dwellings will come on the market in 1999. The overall housing construction activity remains therefore divided:
B. Forest Products Markets
1. Pulp and paper
In 1998, pulp production continued to stagnate under 800,000 t. A marked increase can be expected in this year still after a new sulphate mill has been opened in eastern Germany (a production capacity of 280,000 tonnes annually).
Last year went well for the paper industry all in all, even if the positive development of the first half levelled off in the further course of business. Production of paper and cardboard rose to 16.3 million t (+2%) and annual turnover to around 10 billion € (+4%). Whereas domestic sales increased by 2%, exports (primarily due to the economic crises in South-East Asia, South America and Russia) declined by 3%. The domestic consumption, accounting for around
17 million t, corresponds to a 23% share in European paper consumption
and thus ranks first. The recycling rate reached a new height with 61%.
Expectations for 1999 tend to be guarded. Yet, the industry banks on a
recovery of demand with respect to publications on the topic �turn of the
millenium".
The timber market situation was marked by the following factors:
3. Softwoods
The producer price index for sawn softwood stagnated in the first half
of 1999 at a level slightly below that of the previous year.
4. Hardwoods
Whereas imports almost remained at the same level, exports rose by 12 % to 375, 000 m3.
The producer price index for non-coniferous sawnwood was in mid-1999
slightly higher than in the previous year.
Very early on, the optimistic prospects for the beech logs market led
to high purchase of roundwood. The interest in beech roundwood from the
neighbouring countries and the Far East resulted in a further recovery
of demand. This demand could be met by increased fellings.
5. Wood-based panels
Certification
The Forest Stewardship Council (FSC) and the Pan-European Forest Certificate (PEFC) have become the two major certification systems in Germany and the focus of discussion:
On 1 October 1997 the German working group of FSC was founded aiming at adapting the ten universally valid principles and criteria for sustainable forest management to the specific conditions prevailing in Germany. The FSC General Assembly unanimously adopted the 76 standards on 13 April 1999. They are now at the disposal of the FSC for international recognition.
The FSC is given support in the forestry sector by some representatives of the state, communal and private forests as well as the �Working Group for close-to-nature Forest Management" (ANW). It is retailers, mail-order houses, publishing houses and other enterprises from different fields particularly which have opted for FSC. The business circles concerned are united in a so-called �buyer group" with the professed aim of increasingly including FSC-certified products in their range.
PEFC is an initiative of European forest owners aiming at the establishment of a Pan-European framework for the mutual recognition of national forestry certification systems. PEFC is endorsed by German forestry for the most part and by associations of the forest and paper industries.
PEFC sets minimum standards for the Pan-European, national and regional levels. The standards are based on criteria decided within the framework of the Ministerial Conferences on the Protection of Forests in Europe (Helsinki 1993 and Lisbon 1998) by the competent Ministers.
PEFC is based on regional certification in Germany at Laender level. The so-called �Dessau Declaration" of June 1998 gave the go-ahead for the setting-up of the certification initiative. The PEFC �National Certification Council" was founded on 21 July 1999. A draft self-commitment declaration is currently available. Furthermore, a list of indicators to assess a region has been elaborated. Further details of the certification procedure are being tested as part of a pilot project in three German regions. Moreover, guidelines for the �chain of custody" are currently being worked out. They should be available until the end of the year and constitute a prerequisite for the labelling of timber products.
The Federal Government welcomes certification:
The issue of �chain of custudy" has not been resolved yet. Furthermore, both systems must still prove their credibility in practical use.
Further information on the following topics is available under the internet addresses listed below:
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|
|
|
-million €- |
|||
1997
|
1998
|
1997
|
1998
|
1997
|
1998
|
||
Primary wood processing sector
1)9)
|
2, 717
2, 399 318 |
2, 655
2, 345 310 |
52, 179
30, 418 21, 761 |
51, 636
29, 918 21, 718 |
8, 035
4, 397 3, 638 |
8, 349
4, 480 3, 869 |
|
Secondary wood processing sector 3)9) | without wood and upholstery manufacturing |
1, 143
|
1, 114
|
74, 102
|
71, 543
|
8, 498
|
8, 397
|
Furniture industry 3) 5)9) | including other materials than wood |
1, 535
|
1, 450
|
166, 289
|
163, 789
|
20, 293
|
21, 091
|
Wood craft industry
4) 7)
|
without furniture manufacturing, without timber-related building crafts |
14, 2798)
|
14, 3798)
|
68, 96710)
|
65, 11210)
|
4, 39810)
|
4, 13810)
|
Furniture-manufacturing crafts 4)5)7) | including other materials than wood |
7, 5998)
|
7, 6388)
|
35, 83510)
|
35, 57210)
|
2, 14310)
|
2, 20110)
|
Timber-related building crafts 1) 7) |
28, 5448)
|
28, 8398)
|
183, 02210)
|
175, 73610)
|
12, 12310)
|
11, 68610)
|
|
Wholesale timber trade 6) 7) |
4, 431
|
4, 431
|
53, 979
|
55, 038
|
18, 203
|
18, 544
|
|
Pulp and paper production 1)9) |
245
|
253
|
46 501
|
46 641
|
11 062
|
11 852
|
|
Total wood and paper industries 7) |
60, 4938)
|
60, 7598)
|
680, 87410)
|
665, 06710)
|
84, 75510)
|
86, 25810)
|
Notice: Changes against previous publications are due to newly collected data.
2) Sawmills with 5 000 m3 of raw wood (solid measure) or more of annual sawing.
3) Companies with 20 or more employees, including crafts.
4) Enterprises with 1-19 employees
5) Without production of mattresses
6) Enterprises with a turnover of € 12 500 or more
7) Partly estimated
8) Manufactoring crafts 1994 according to craft census (Handwerkszählung) 1995
9) up to 1997 extended since some units from the register of craftsmen (Handwerksrolle) are included.
Selected economic indicators1)
Country: Federal Republic of Germany
(actual) |
(actual) |
(estimate) |
(estimate) |
(Percentage change on previous year)
Gross Domestic Product2) |
|
|
|
|
Industrial production2) 3) |
|
|
|
|
Construction investment2) |
|
|
|
|
of which:
- new dwellings (completions) |
0.0 |
|
|
|
- new non-dwelling construction |
|
|
|
|
- repairs, maintenance and
modernization |
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Activity in wood-using
industries |
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- Building joinery (doors, etc.)4) |
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|
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- Furniture4) |
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|
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- Packaging4) |
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- Pulp and paper4) |
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1/The indicators shown are for guidance only. Countries should select those which are
readily available and appropriate for their economies.2/Constant prices of 1995
3/Industry without construction
4) Source: Statistisches Bundesamt Wiesbaden,
Current prices Fachserie 4 (Produzierendes Gewerbe), Reihe 3.1 (Produktion)