Economic growth in France slowed down in 2018, with GDP growth of just 1.5%, compared to 2.3% in 2017. In the fourth quarter, in particular, the movement of “yellow vests” had a negative impact on household consumption and the economy overall. The OECD expects that French GDP growth will continue to range around 1.5% in both 2019 and 2020.
However, the French unemployment rate fell unexpectedly towards the end of 2018 (to 8.8% from 9.1% in the previous quarter) and in early 2019 consumer confidence rebounded to “pre-yellow vest” levels, according to the French statistical office.
Timber sector economic trend
According to FNBM, the trade organization that represents timber and building material merchants, sales growth for timber merchants slowed down in the last three months of 2018 and only grew by 0.4%. The good performance in October was insufficient to compensate for weaker results of November and December, related in particular to the movement of yellow vests and several bank holidays at the end of the year. Overall, sales of wood products grew in 2018 by 3.3% which was lower rate year-to year compared to 2017.
However, business confidence among FNBM members for the first half of 2019 is good based on a growing demand among craftsmen and small contractors. Sales of industrial packaging, a sector which is a large consumer of plywood, also grew both in volume and turnover by + 2,5 %.
The external trade deficit of the French wood industry continued to grow by 6.4% to 6.8 billion euros in 2018. Imports are growing faster (+ 4.1% year-to-year) than exports (+ 2.5%).
Trade with VPA partner countries
France imports a wide range of wood products from VPA partner countries, including wood furniture, veneers, sawnwood, joinery, and paper products with wood furniture being by far the most important product group in terms of value.
Vietnam is the largest VPA country supplier of wood furniture to France and imports from the country continue to grow. Indonesia also delivers significant volumes of wood furniture. However, French imports from Indonesia have shown a constant downward trend in the last few years. According to French IMM survey respondents, Indonesia delivers more high-end, hand crafted furniture to France, whereas China and Viet Nam tend to supply mass markets. During the IMM 2018 survey, several respondents said that they were keen for Vietnam to start FLEGT-licensing.
Besides wood furniture, Indonesia also supplies joinery products and Malaysia is another major supplier of this product group.
The African VPA partner countries play a relatively large role in France’s tropical timber supply. For example, unlike most Northern European countries which source tropical hardwood plywood primarily from Indonesia and Malaysia, France imports most of its tropical plywood from Gabon, followed by Malaysia. It is likely though that some of the Indonesian tropical plywood imported into Belgium is being sold in France and Indonesia may thus indirectly be the biggest supplier after all.
Gabon is also France’s most important tropical timber supplier in Africa overall. The country is a key supplier of okoumé veneers to major French plywood manufacturers. Cameroon is the country's main supplier of sawn softwood, followed by Malaysia, Gabon and Côte d’Ivoire. Logs are sourced primarily from the Congo Basin.
Key users of tropical timber from VPA partner countries in France include the timber and furniture trade as well as builders' merchants, building contractors - especially for bespoke joinery projects where tropical hardwoods still maintain a high-end niche market -, door and window manufacturers as well as boat builders. Moreover, in 2017 the French railway company has switched from using creosoted oak railway sleepers to sleepers made of tropical hardwood.
Overall, the use of tropical hardwoods in France has declined over the last decade. Tropical timber products are increasingly competing with treated softwoods and temperate hardwoods both from EU Member states (Czech Republic, Poland, Rumania, Hungary, Slovenia) and producer countries outside the EU, such as the Ukraine. Tropical plywood, especially from Indonesia, has been replaced with Russian birch plywood. These substitute products have been gaining market share in recent years due to fashion trends, easier availability and corporate policies; several major operators have committed to reducing the share of tropical timber in their product mix due to pressure from ENGOs.
For more information and latest trade data go to the IMM Data Dashboard or the IMM website.