Overall actual softwood timber market reflection (inspired by PMI outcome March 2025)

𝗣𝗠𝗜:
The global manufacturing PMI declined slightly but still remains just above the growth threshold (50.3).
There is no evidence in the PMI output of any improvement in growth momentum. This is despite several encouraging signs of resilience in China and a return to growth in the Eurozone (first showed growth in 2 years)! On the other hand, there was a deeper downturn in Japan and the US.
In the Eurozone, input prices clearly rose, although inflation remained moderate. New orders are hardly declining anymore, and input purchases are decreasing much more slowly than a few months ago. The extra government spending in the defense sector and adjacent areas is not expected to have an effect in the short term. There is some hope that fiscal Europe spendings in countries such as Germany and France will not only increase significantly but also spread to other countries, thereby boosting their growth figures as well. However, this will likely not be felt until 2026 and beyond.
Even though the Eurozone is on the right track, we still have to wait and see how the potential trade war unfolds…

𝗧𝗶𝗺𝗯𝗲𝗿:
Timber prices are on an upward trend. ‘One-sided’ from the wooden packaging industry’s perspective. Especially considering that customer demand has not increased. In fact, due to the recent ‘Trump tariffs’, demand may even decline rather than see a recovery. Although there are reports suggesting that consumers might benefit from shifting trade winds and thus better supply conditions — …could this also affect the timber industry? For now, demand from the US has actually increased the last months ‘in anticipation’, but what if exports shift and become more focused on the Eurozone?
Center-cut timber is leading the price pressure. Mainly due to a structural shortage of spruce, the market is more willing to accept price increases, as demand (for spruce) exceeds supply.
Looking at cost pressure, availability issues, and the potential to scale up the sawmill industry, I’m not worried about an oversupply of timber. The real wildcard here is the trade flows (read: demand). Will everything continue, and just move to different continents? Will pine be accepted as a substitute for the lack of spruce? When will the current disappointing UK outlook turn around again? Will the convincing price increase continue in the coming months?
We’ll see what comes out of the geopolitical magician’s hat in the coming months.
Do you know…?

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