The Dutch economy has recovered from the economic crisis and continues to grow. GDP increased by 2.9% in 2017, with domestic industrial production increasing by 4.1% and exports by 5.3%. In 2018, GDP growth stabilised at 2.5% and the outlook for the Dutch economy is still positive, with GDP growth above Eurozone average forecast for 2019 by Dutch bank ING. The Netherlands Bureau for Economic Policy Analysis (CBS) forecasts further GDP growth by 2.5% in 2019.
Unemployment decreased further in 2018, ranging around just 4%. CBS expects this trend to continue, with an unemployment rate of 3.5% in 2019.
Increasing private consumption, government spending, exports and investments by companies and in housing are the main drivers of economic growth. Consumption has increased due to a combination of increasing wages, the good employment situation, increase in house prices and consumer trust.
Timber sector economic trend
The very positive economic situation in the Netherlands is reflected in the performance of all wood industry sectors. For 13 months in a row, producer confidence in the wood industry sector has been higher than in all other industrial sectors in the Netherlands.
Trends in the residential building sector are a good indicator for overall trends in the Dutch timber market. The number of new homes completed in 2017 increased by almost 14% compared to the year before and figures for the first half of 2018 indicate that growth expectations will be exceeded in 2018. In line with the developments in the building sector, Dutch producers of building materials show an increase of more than 2% in production volume in the third quarter of 2018 compared to the year before.
According to Statistics Netherlands wood industry (joinery, packaging, etc.) production volume increased by 7.3% year-on-year in the third quarter of 2018.
The situation in the Dutch furniture industry has also improved in 2018. Production volumes increased by almost 2% in the third quarter of 2018 compared to the same period in 2017.
Trade with VPA partner countries
Indonesia (42.5%) and Malaysia (31.8%) were the Netherlands most important trading partners among the VPA partner countries in 2017. The share of Indonesia has increased by 2.4 percentage points compared to 2016, mainly at the expense of Malaysia. Imports volumes from Indonesia – primarily of wood furniture, mouldings and plywood – increased in 2017, while imports from Malaysia stagnated.
Sawnwood, which accounts for more than 33% of Dutch wood product imports from VPA partner countries, is the single most important product group imported from this group of countries by the Netherlands. Furniture (17.4%), joinery products (15,7%) and plywood (13.1%) follow at some distance.
With a share of almost 66% Malaysia was the main country of origin of imported sawn tropical hardwood from VPA partner countries in 2017, followed by Cameroon (11.3%) and Indonesia (9.4%). The share of Cameroon has declined substantially (7.4 percentage points), which is mainly due to the shutdown of the operations of the Dutch firm Wijma Cameroon.
When it comes to wood furniture, Indonesia (53.5%) and Vietnam (43,6%) are the main VPA countries of origin, based on the quantity. The share of Indonesia increased by 3.8 percentage points in 2017. The quantity imported from Vietnam increased as well, but at a smaller scope (12.3%).
Imports of joinery products from VPA countries are dominated by Indonesia (62.8%) and Malaysia (35.2%). This is mainly due to the fact that Dutch companies have factories in these countries or have supported Indonesian and Malaysian companies to acquire a KOMO certificate needed to sell joinery products on the Dutch market under a guarantee fund.
Plywood is the only product group not completed dominated by Asian VPA countries, although Indonesia (39.5%) and Malaysia (23.7%) have a combined share of more than 63%. Among the African countries, Gabon is the dominant supplier with a share in overall Dutch imports of 35.7%. However, Gabon has lost market share to Indonesia in 2017.
Civil engineering and waterworks sector are the most important market sectors for tropical sawn hardwood in the Netherlands, followed by the joinery industry (30.5%). The construction sector as well as the DIY and garden sector are also important users of tropical sawn timber on the Dutch market. Tropical plywood is primarily used in the furniture and joinery industry, as well as the construction sector and in DIY/gardening.
For more information and latest trade data go to the IMM Data Dashboard.