As in the Q2 economic survey, 40% of Austrian and German forestry companies described their business situation of the past six months as bad and 57% as satisfactory in the survey for the third quarter. Only 3% reported a good business situation in the past six-month period. As for the next six months, however, the survey participants hope for a slight improvement: Two thirds expect their business situation to develop satisfactorily, while 7% anticipate a positive development. 26% believe in a negative development. Compared to the previous survey, outlook has become much more positive. Three months ago, 47% expected a negative development of their business situation.
A similar picture emerges when it comes to sales. 63% of the forestry companies report satisfactory sales in the past six months, whereas one third rates their sales as weak. However, 40% of forestry companies expect sales to increase in the coming six months and 47% think that they will remain unchanged.
Sellers and buyers expect higher log prices
When asked about log prices, forestry companies gave assessments similar to those in the economic survey among sawmills. 67% of forestry companies expect log prices to rise in the next six months. In contrast, 10% predict falling raw material prices.
Fear of high costs
According to the results of the economic survey, forestry companies do not only expect sales to increase, but also costs. 40% are faced with higher wood harvesting costs in the coming six months. 57% expect these costs to remain unchanged. The answers regarding the costs of transporting log wood in the coming six months are somewhat more moderate: Here, the vast majority (74%) expects costs to remain constant, while 23% predict increases.
Biggest challenges at the moment *
Log sales:
- Log revenues are too low given the current cost structure.
- As a result of low prices for industrial log wood, no thinning is done.
- Low yields combined with high costs impacts companies’ ability to act. Extraordinary expenditure is virtually no longer affordable.
- There is pressure due to low log prices and increasing producer costs.
Personnel:
- The shortage of (skilled) workers affects both companies’ own staff and entrepreneurs in log harvesting and transport.
- Finding skilled workers remains difficult.
- Lack of human resources and time make the situation more difficult.
- The shortage of skilled staff partially leads to layoffs and a focus on other business areas.
Forest protection:
- Bark beetles have caused enormous damage which results in a sharp drop in revenue while reforestation and forest management costs are high.
- Dealing with the snow breakage situation from September 2024 affects about one quarter of the annual logging volume and requires swift action.
- The renovation of infrastructure as well as the clearing of land after disasters are necessary for reforestation.
- Protective forests and maintaining stable forest stands are priorities; natural regeneration and diversity in tree species have to be promoted.
EUDR:
- There are many unanswered questions regarding its implementation, which causes great legal uncertainty.
- Digitalizing the wood flow, e.g. in the form of a digital delivery note, is one possible solution.
- The implementation of EUDR and the Renaturation Act is unclear.
- Forestry companies need clarification before they can fully implement the regulation.
- Companies criticize that nonsensical legal requirements, especially the EUDR, are a burden on the sector.
* Answers to the question: What are the biggest challenges you are currently faced with and how do you handle them? (edited/summarized by the editor)
