‘The International Monetary Fund cut its economic forecasts for Britain and said more Bank of England stimulus - and possibly higher public spending or tax cuts - may be needed if the outlook darkens.The IMF forecast Britain's economy would shrink 0.4 percent this year, before growing by a tepid 1.1 percent in 2013.The IMF said the downgrade was part of a global slowdown - and that Britain's economy would probably outpace the euro zone's next year.’
Signs of a plateau are beginning to appear in the UK forest products market. For some time now our industry has defied the daily diet of dire economic news, however as stocks of both round wood and in some cases finished product begin to grow we approach the second half of the year with a little more caution than we did the first. While the industry is still performing well compared to much of the economy, the firming of sterling at a rate of around €1.25/£ begins to erode the competitive edge of our processors particularly on the export front. This coupled with poor weather has led to increased inventories around the country.
Most sectors of the homegrown timber trade have experienced very high levels of activity during the end of 2011 and the early months of 2012. The level of trade, in some cases, record throughput in some months, seems to defy economic gravity. Put against an economic background of European financial contortions to keep the Euro intact, and historically high levels of peacetime debt in the UK with all the austerity that brings; it seems barely credible that record levels of activity can be recorded in an industry that is closely linked to construction. I am sure there is a simple explanation, other than the value of sterling but I am tree counter not an economist and happy to raise a glass to the continued defying of gravity.
am writing this report in the midst of a maelstrom of a European debt crisis that is changing by the hour and seems increasingly intractable. The centre of this storm is the crisis in Greece and its potential knock on effect to some larger European economies. How does this affect us in the UK timber market?
The current market for standing timber remains buoyant despite some underlying concerns by end users. Demand for standing timber from merchants and direct harvesting organisations has kept standing prices in a very healthy state during 2011 with prices continuing to rise.
The earlier than expected snow late last year, caught many markets by surprise, resulting in low timber stocks for many end users. This shortage caused some markets in all categories of round wood to offer some prices on a project basis to recharge their inventories.