The Belgian economy grew by to 1.5% in 2018, according to the National Bank of Belgium, which was slightly less than forecast. A similar rate of growth is expected for 2019. In 2020, the National Bank reckons with a further slight slow-down in growth to 1.4%. Economic growth in Belgium thus remains slightly below Eurozone average.
Consumer confidence was volatile in 2018. A positive average trend in the first months of the year turned negative in June and, with the exception of a short-lived recovery in October, remained negative to the end of the year and early in 2019, according to a survey by Trading Economics.
Timber sector economic trend
Among the sectors of the Belgian economy that are relevant to the timber trade, notably construction performed well in 2018. With an expected growth of 3.7%, construction is showing a stronger trend than the Belgian economy as a whole, according to the Belgian Building Confederation. Growth in the building sector is driven by new housing construction (+ 7%), residential renovation (+ 1%) and especially non-residential renovation (+ 7%).
Demand in the furniture sector, by contrast, remained relatively weak, with almost all product groups affected by the decline. Sales fell by 6% in 2017 and by another 2.7% in the first half of 2018, according to Fedustria. The Federation explains the negative trend with uncertainty and caution among consumers due to an increase in energy and fuel costs and higher living expenses, among other things. However, Belgian furniture exports continued to grow, and furniture industry capacity utilization rates recovered in 2018, after falling as low as 75% in 2017.
Trade with VPA partner countries
Belgium serves as a distribution hub for wood products, including from VPA partner countries, into the EU markets. As a result, Belgium’s deliveries to other EU markets must be taken into account when examining its trade statistics.
Belgium imports a wide range of tropical wood products from VPA partner countries. Tropical sawn hardwoods are primarily sourced from African countries, especially from Cameroon, Gabon and the Congo Republic. The Congo Republic, Cameroon, the Democratic Republic of Congo and the Central African Republic are also Belgium's main VPA partner country sources for tropical logs.
However, in value terms Indonesia is the most important VPA partner country supplier of tropical timber products, including furniture, plywood and joinery products for the Belgian market. When it comes to tropical plywood more than 80% of Belgium's imports from VPA partner countries came from Indonesia in 2017. Other relevant suppliers are Malaysia and Gabon.
Belgian furniture imports from outside the EU also come primarily from Asia. Indonesia, followed by Malaysia and Viet Nam, are the main VPA partner country sources. However, the primary supplier is China.
In terms of joinery, Viet Nam currently supplies the lion’s share of Belgian imports from VPA partner countries, followed by Malaysia and Indonesia. Belgium also imports glulam joinery from the Democratic Republic of Congo (DRC). Indonesia is Belgium’s main supplier of mouldings, followed by Gabon, Côte d’Ivoire, Malaysia and Cameroon.
Traditional markets for tropical hardwoods in Belgium are external joinery, external cladding and decking, gardening and garden furniture as well as flooring where their natural high density and class of durability meets with technical requirements. Over the last decade, tropical timber has come under increasing pressure from substitute products made of treated softwoods or wood plastic composites. However, tropical hardwoods have kept a niche in the decking market and quite a substantial share in the timber external joinery market. In flooring, tropical timber has lost market share to Eastern European and Chinese hardwood flooring as well as to moisture-resistant laminate flooring.
In 2018, several survey respondents reported issues with availability of tropical timber products from several regions, including the African VPA partner countries and Indonesia. Belgian’s tropical timber trade would thus be restricted by supply shortages, especially of certified timber and timber with well documented supply chains, rather than a lack of demand. The primary reason given for the supply restrictions was purchasing competition from less demanding Asian and Middle Eastern markets. Moreover, European companies withdrawing from forest management and production activities in Africa had narrowed the supply of (FSC) certified timber.