Federal Ministry of Food, Agriculture and Forestry, Bonn
STATEMENT

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
1. Trends and short-term outlooks
    1. After a slowdown in economic growth in the second half of 1998, the Federal Government expects in all probability a marked acceleration of economic activities in the course of this year. Most national and international observers share this evaluation.
    The current indicators of economic activity as well as the domestic product calculations of the Federal Statistical Office for the first quarter support the expected accelerated continuation of the upswing. After a slight decline in the general business activity in the fourth quarter of 1998 (-0.1 %), a marked price- and seasonally adjusted growth (+0.4 %) was again recorded in the first three months of 1999. The current indicators of economic activity show that the upward trend � even though weaker - in the second quarter probably continued all in all. A more pronounced upswing is expected for the second half of the year, which is also required to reach the growth rate calculated by the spring projection for the entire year.

    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.
     

      2. Situation and short-term trends in major end-use sectors for forest products
       
    Primary and secondary wood processing

    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:

    1. Financing costs for long-term building investments are at the lowest level for decades.
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  Enterprises, labour force, turnover
Sector
Remarks
Enterprises
Labour force
Turnover

-million €-

   
1997
1998
1997
1998
1997
1998
Primary wood processing sector 1)9)
  • saw mills 2)
  • production of wood based panels 
 
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.

1) Enterprises with 1 or more employees.

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.

  1. changes due to another base for the craft reporting (Handwerksberichterstattung).
Sources: Federal Statistical Office, Federal Ministry of Food, Agriculture and Forestry (532).
 
 

Selected economic indicators1)

Country: Federal Republic of Germany
 
19972)

(actual)

19982)

(actual)

19992)

(estimate)

20002)

(estimate)

(Percentage change on previous year)
Gross Domestic Product2)
+ 1.8
+ 2.3 
ca. + 11/2
ca. + 21/2
Industrial production2) 3)
+3.3
+ 5.2
ca. + 0
ca. + 21/2
Construction investment2)
- 1.7
- 3.8
ca. +11/2
ca. + 11/2
of which:

- new dwellings (completions)

0.0
- 3.6
ca. + 0
ca. + 11/2
- new non-dwelling construction
-4.0
-4.1
ca. +11/2
ca. +2
- repairs, maintenance and

modernization

       
Activity in wood-using

industries

       
- Building joinery (doors, etc.)4)
+ 3.6
+ 3.5
   
- Furniture4)
- 0.9
+4.8
   
- Packaging4)
+6.4
+ 6.8
   
- Pulp and paper4)
- 0.2
+ 2.9
   
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,

Fachserie 4 (Produzierendes Gewerbe),

Reihe 3.1 (Produktion)

Current prices