The sawmilling industry across Europe continues to face challenging circumstances. Record high log prices combined with stagnant sawn timber prices, driven by low demand across Europe, are continuing to put the industry under significant pressure. Production curtailments in the third quarter have taken place and will limit the growth of stocks entering the fourth quarter, which is traditionally a quiet period for sawmills.

The general sentiment in the sawmilling industry remains poor, and this is not expected to change in the foreseeable future.

The UK timber industry operates within a global marketplace and international trade flows are currently being challenged with the imposition of new tariffs on lumber entering the US. The impact of these tariffs will inevitably be felt in the EU and UK market going forward; exactly how remains to be seen.

Demand for machined timber products in the UK has been subdued in the third quarter. Customers are managing their stocks and working capital carefully, placing orders only when they have certainty of the corresponding sale. For manufacturers, availability, service and price are key to winning business currently and, we at Metsä are focused on ensuring we have the best available offer for the market. As an aside, the level of house transactions in the UK remains low. Often, when people move, they look to improve their property before placing it on the market. This, together with other factors such as consumer confidence, will need to improve to increase demand in the Repair, Maintenance and Improvement (RMI) market.

House building and general construction activity remains weak and well short of government targets. I will leave my opinion on the viability of these targets for another day! There are pockets of residential building activity in certain parts of the country and these more buoyant regions seem to be linked to house affordability which tells us that the underlying demand for property is still there, when it is affordable. We still see very positive potential in engineered wood products, and timber technology is constantly evolving, which will provide opportunities to grow demand for these products beyond the typical single-family house.