The Wood Industry Amid Economic Shifts in the Eurozone & U.S.
Eurozone: Slowing Growth, Climbing Prices
The global timber market is facing a turning point. As economic trends shift across major markets like the Eurozone and the United States, we’re seeing rising timber prices in Europe—driven by inflationary pressures, tight supply, and currency fluctuations. At the same time, the U.S. construction outlook is strengthening, offering potential demand growth.
The European Commission has reduced its 2025 growth forecast to 0.9%, down from 1.3%, citing weaker economic conditions. Despite the slowdown, timber prices in Europe continue to rise due to:
Higher production and transportation costs
Energy-driven inflation affecting sawmills
Continued demand for construction and packaging wood in public sector projects
Exporters facing currency-linked price increases due to a strong euro
This creates a unique situation: economic pressure on buyers, but still strong demand and limited supply, pushing prices higher.
U.S.: A Different Story—Interest Rates & Housing
While the U.S. has faced fiscal challenges, including a recent credit rating downgrade, signs of easing interest rates are beginning to emerge. Lower borrowing costs could revive the housing sector, which is a key driver of timber demand in the U.S.
Why it matters for exporters:
Increased housing starts mean more demand for construction-grade timber
Potential shift in supply priorities as mills respond to growing U.S. needs
Exporters must stay agile as the U.S. becomes a more attractive market again
Mills could prioritize higher-margin domestic sales, making it harder for Asian and MENA buyers to secure volume at competitive prices
At ALC Group, we are advising our global clients to enact the following policies:
Secure contracts early, especially for Q3/Q4 2025 shipments
Partner with suppliers who offer stable quality, export-ready documentation, and reliable logistics
Plan ahead for longer lead times and possible price fluctuations
We remain committed to supporting our partners across the world with consistent supply, market-aligned pricing, and strong communication—despite global volatility.
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Disclaimer: The views expressed in this article are solely those of ALC Group and do not represent any official position. This content is for general informational purposes only and should not be considered legal or professional advice. ALC Group is not liable for any decisions made based on this information.