Country Profiles

Access to latest commentary on timber industries and economies of EU and VPA partner countries

KEY EU COUNTRY

FRANCE

Last updated on 21 April 2022

General Economic Trend

According to the Winter 2022 European Economic Forecast (EEF – published February 2022), France’s economic rebound after the worst of the pandemic took GDP back to 2019 levels in Q3 2021. After growing 3.1% that quarter, output contracted 0.7% in Q4, but that still left GDP growth for the year at 7%, 1.5% higher than earlier forecasts.

Despite an increase in Covid infections early 2022, France’s high vaccination rate was expected to prevent further restrictions on business, with GDP forecast consequently to grow a further 0.1% in Q1 and 0.6% in Q2. Activity, said the EEF, was then expected to accelerate due to stronger international trade and recovery in tourism.

Despite being constrained by supply disruption since mid-2021 (impacting construction and equipment), investment levels were expected to remain robust, underpinned by government recovery spending under the EU Recovery and Resilience Facility Regulation (RRF).

Net exports are also forecast to contribute positively to growth throughout 2022 and 2023, supported by the rebound of tourism and the gradual recovery in transport equipment (both aircraft and ships),” stated the EEF.

Taking all these factors into account, its prediction for annual GDP growth in 2022 was 3.6%, followed by further 2.1% rise in 2023. There is a proviso here, however, as this forecast was predicated on deceleration in inflation and according to Trading Economics, the annual rate rose to 4.5% in March, the highest since December 1985. Most upward pressure came from energy prices, followed by increased cost of food and services. Delayed transmission of energy costs along the supply chain and continuing supply shortages in key goods were also expected to put further upward pressure on consumer prices.

However, the EEF forecasts that inflation will slow below 2% in Q4 2022 and it predicts the rise in the Harmonised Consumer Price Index for the year to be 2.8%, followed by 1.7% in 2023.

Timber Industry

Construction

Unleashed pent-up demand from the pandemic, underpinned by government fiscal support measures, contributed to an 38,100 increase in housing starts in 2021 to 391,800. That still left housing production 5.8% below the 2019 level, and starts down on 2017 and 2018 (437,000 and 399,000). But output is predicted to rise 7.3% in 2022, with the 17.5% rise in housing permits granted in 2021 to 472,000 forecast to translate into an overall 2.1% increase in housing starts.

Construction growth might have been greater, but for continued supply issues affecting the majority of building materials. This in turn pushed up prices, with the cost of steel, timber and pvc products increasing between 60-80%. Increasing inflationary pressure in wood, according to building products distribution federation the FDMC, is increased exports of logs and lumber, notably of oak to China. It estimated that the latter now accounts for 25-30% of France’s total production. The FDMC also expected increased French softwood exports to the US to tighten supply and boost costs.

The French building federation FFB said that their members had seen a further 10-15% hike in prices across most materials at the start of the year, with rising energy costs cited as the reason by suppliers.

Positive news for the use of timber in French construction, however, comes in the form of the RE2020 environmental regulation, which enters into force in 2022. This requires the sector to make significant cuts in carbon emissions, with an increase in bio-based building materials seen as one of the key routes to achieving this. Currently timber-based housing accounts for just 10-12% of single family dwellings, and 7-8% of multiple-home developments, three times less than Germany. But RE2020 is expected to see timber-frame building increase its share rapidly.

The timber sector is hoping the 2024 Paris Olympics, with its strong green agenda, will help further boost timber-based building, with industry body France Bois Forêt pressing strongly for its use in main Games developments. In a controversial decision, the organisers barred use of tropical and boreal timber unless there was no alternative, in which case it has to be certified. Trade bodies said this would potentially damage the image and public trust in legal and sustainably produced tropical material and products. However the International Tropical Technical Association (ATIBT) is lobbying strongly for this ban to be dropped and, following meetings with the organisers and the mayor of Paris is ‘hopeful of a positive outcome’.

Repair, maintenance and improvement

In common with countries across Europe and around the world, France saw strong growth in the repair, maintenance and improvement market (RMI) in 2021. Total sales value was still 2.6% off pre-Covid levels, but was up over the year 6.8%, boosted by the desire of consumers in lockdown and working from home in the pandemic to improve their properties and convert them to live-work spaces. Thermal-retrofitting performed strongly but so did timber-based extension building and loft conversion, up 30%.

The pandemic also gave the DIY sector added impetus. Multiple chains Castorama and Leroy Merlin reported all time high profits in 2020 and the total market grew 13% to a record €31 billion.

Decking sales benefited strongly from the pandemic RMI boom, with a report commissioned by French timber trade federation Le Commerce du Bois showing consumption jumping 34% from 2019 to 2021 to reach an annual total of 16 million m2. Softwood products accounted for 60% of the market, but tropical also took significant share with sales totaling 3 million m2. Ipe and cumaru were the top performers, but IMM survey respondents reported selling a range of other species, including merbau, bangkirai, padouk, afrormosia, massaranduba, cumaru, tatajuba and jutaï.

Another star RMI performer was wood cladding, with total sales across RMI and new build up 12.5% in 2020 and 11% in 2021 to over 7 million m2, according to French timber trade association Le Commerce du Bois.

In ‘natural’ untreated cladding, Douglas fir has 60% market share, larch 34% and Western Red Cedar 6%. In treated cladding, Norway spruce accounts for 73% of sales, Scots pine 14% and Douglas fir 13%, while in products with a ‘saturator’ finish to limit greying, market breakdown is Douglas fir 37%, larch 25%, Western Red Cedar 21% and Spruce 17%.

Demand is reported for thermo-treated Ayous for cladding, but otherwise use of tropical hardwoods in the market is minimal.

Joinery

According to a 2020 market report, PVC products remain the lead player in the French windows market, with a 60% volume share, with aluminium second with 29.9%. Wood window sales, however, continue to grow, accounting for 8.5% of the market in 2020 despite reported tight raw materials supply. By value their share rose 10.3% to 11.7%.

The wood windows market is dominated in value by small to medium sized manufacturing, which takes a 68% share. A major change has been the increase in factory-finishing, which now accounts for 68.8% of wood window production, against 31% a decade ago.

Use of tropical timber in French external joinery has declined, falling from 63% of the market in 2010 to 46.9% in 2020. Temperate hardwoods now account for 22% of production and softwoods 31.1%.

Window imports take 11% of French sales, amounting to 1.1 million units. Of this, PVC accounts for 88.5% . Imports of timber windows have grown but still only account for 4.3% of the total, while, while products from abroad have seen their share of the French timber-aluminium windows market rise to 5.7%.

The serious adverse impact of the pandemic on its key retail and hospitality customers, saw the French bespoke joinery sector’s sales contract 20% in 2020 and it was further hit by price rises in main materials, notably wood panels, of up to 50%. However, it was expected to have gained impetus from the 2021 growth in RMI.

Flooring

Late 2021,the European Parquet Industry Federation reporting the sector Europe-wide being constrained by raw materials availability issues, high import freight rates, plus manufacturing and installation skills shortages. However, once more driven by rising RMI expenditure, sales continued to grow. The French market was no exception, seeing a 2020/21 double digit increase to put sales 5% above 2019 levels. There was a particularly strong increase in imports of wood ‘flooring panels’ from Indonesia, up nearly 30% to $3.5 million, with a similar level anticipated in 2021.

Furniture

Pandemic lockdown, quarantine and increased home working are also seen as lying behind strong growth in French furniture sales from 2020 through 2021. The IPEA institute, which monitors the market, reported furniture and interior decoration sales rising 35.8% in June, 13.7% in August and 12.8% in October 2020, with further annual growth of 4.7% to 5.7% predicted for 2021.

By value, French furniture imports from VPA countries rose over 44% in the first 10 months of 2021 compared with the same period of 2020 to $220 million. Of these, the lead suppliers were Viet Nam and Indonesia. Their 2020/2021 French sales by volume were both expected to remain roughly level. However both enjoyed strong value increases. French first 10 months 2020/21 imports of Vietnamese wooden furniture (HS 94036090) grew 57% to $32.4 million and of upholstered seats with wooden frames (HS94016100) up 22% to $39 million. Imports of HS94036090 wooden furniture from Indonesia were ahead 50% at $28 million, while those of HS 94036010 living/dining room products were up around 30% at $10.6 million. Third biggest VPA volume supplier to the French market after Viet Nam (33,363 tonnes in the first 10 months of 2021) and Indonesia (15,291 tonnes), was Malaysia. Its first ten month French sales were up around 3%.

Tropical Timber Imports & Trade

The French timber merchanting trade saw sales contract dramatically from March through April 2020 in peak pandemic lockdown. However, according to the IMM 2021 trade survey for France, over 2020 as a whole it proved remarkably resilient to the health crisis, finishing the year with overall sales just 3% down on 2019. Merchants benefited particularly from the growth in the RMI and DIY markets, as consumers confined to their homes and having to use them as a workspace, spent money saved on holidays and leisure activities on improving their properties, including gardens. Merchants also opened from lockdown earlier than DIY multiples and so were able to capitalise on this trend sooner. It increased their sales to consumers too, as opposed to trade customers. This boosted margins, with some reporting consumer business accounting for up to 40-50% of turnover.

Overall merchants timber sales continued to recover through the second half of 2020 and into 2021. The French Federation of Builders Merchants (FDMC) is yet to release full figures for last year, but report the sector’s turnover in the first four months of 2021 25% up on 2020.

Sales rose across the timber range; structural wood products, decking, cladding, flooring and insulation.

The merchant sector, however, also faced challenges, notably significant price rises and supply issues. Rising prices, of course, contributed to rising turnover, but created budgeting challenges and, said the FDMC, concern about how long customers would absorb the increases.

Meanwhile lead times on a wide range of products continued to increase. Sawmillers and wood product manufacturers were reported struggling to crank up production, which had been constrained by health crisis control measures, to meet booming demand globally. Rising exports of softwood, to the US and China and oak and Douglas fir to the latter, added to French merchants’ supply pressures.

Trade with VPA Partner Countries

Overview

After contracting sharply at the early 2020 (down 23% in Q2) at the height of the pandemic restrictions, French tropical wood imports began their recovery in the third quarter.

IMM survey respondents report continued upturn through 2021, although the market was not without its issues. Demand for African sawn hardwood was reported as very good and importers welcomed the decision of CEMAC (the Economic and Monetary Community of Central Africa) to delay the ban on member countries’ log exports by a year to 2023. Importers are anticipating the eventual impact of this move, however, expecting the African log trade to switch to boules, which they say will restrict French processors’ ability to supply wider boards and longer lengths. Delays in the issue of export documents in the Congo Basin, presumably a hangover from pandemic lockdown backlogs, were reported and African supply generally was reported to be under increasing pressure due to problems accessing – and affording – Asian and Brazilian timber. African prices as a result were on an upward trend.

Brazilian production was reported to be slow to recover from pandemic plant closures and curtailments. Combine this with soaring demand for Brazilian timber in the US and the result, French importers reported, was gaps in supply and high prices. Ipé was particularly hard to source, leading to buyers switching to African species such as padouk, which in turn was said to be increasingly hard to find. Substitution of Brazilian species was also reported to have affected bilingua and azobé availability and importers struggled to persuade customers to take alternative African species.

Survey respondents reported Malaysian production picking up again through 2021,having been severely curtailed by pandemic. But they say recovery in sales of Malaysian and Indonesian timber and wood products was restricted by record container freight rates, with some citing ten-fold increases from 2020 through 2021. This however did not prevent French imports from Viet Nam growing strongly (up 24% in volume in the first nine months of 2021), which was attributed to the fact that these comprise more value-added goods.

Long-term respondents saw tropical timber trade moving increasingly into further-processed goods at the expense of logs and lumber. Tropical sawn timber demand was reported in long-term decline, while sales of more ‘elaborated products’, such as decking strips and window scantlings, were climbing as customers seek higher yield and increased manufacturing efficiencies.

France and VPA supplier countries

France continues to source timber and wood products from all FLEGT VPA supplier countries. The product split between suppliers also remains pretty constant. African supplier countries provide predominantly sawn timber, logs, veneer and plywood, while the Asian producers supply a wider selection of goods, including furniture, joinery and paper products.

According to the IMM data dashboard, imports from all VPA countries combined, including pulp and paper rose from $387 million in 2020 to $434 million in 2021. Within this total, wood and wood furniture imports rose from $360 million to $413.6 million.

Hover over the chart to see exact data

France-VPA partner country trade January-December 2021 (in €)
Source: IMM Data Dashboard

Trade with Top 5 VPA Partners

Frances top five VPA suppliers of timber and wood products remained Viet Nam, Indonesia, Gabon, Malaysia and Cameroon, but with Indonesia overtaking Gabon to be the second biggest.

The IMM Data Dashboard showed ongoing volatility in all five countries’ exports through the year, particularly those of Viet Nam which hit a monthly total of €17.8 million in April, before falling to €3.4 million in October, but then rising in December to €8.5 million. This volatility is seen as partly due to the ebb and flow of international trade, but exacerbated by ongoing changes in Covid constraints on supplier businesses, plus personnel infection rates.

But all lead suppliers, bar Malaysia, saw their exports to France rise; Viet Nam’s were up 11%, Indonesia’s 39%, Gabon’s 17% and Cameroon’s 11.5%. The drop in Malaysian sales was 2.9%. This was attributed in part to ‘normal’ trade fluctuation, but survey respondents said trade with Malaysia was also adversely impacted by strong exchange rate movements between the ringgit and dollar. Others said they had switched to Indonesian scantlings due to the reduction in price differential with Malaysian.

Hover over the chart to see exact data

France- top 5 VPA partner trade 2020-2021
(3 month rolling averages; HS44, HS47, HS48, and HS94 products)
Source: IMM Data Dashboard

Hover over the chart to see exact data

France – top 5 VPA partner trade 2020-2021
(HS44, HS47, HS48, and HS94 products)
Source: IMM Data Dashboard

Viet Nam

Vietnamese timber, furniture and joinery exports to France, after declining 7% in 2020 to €126 million due to the impact of pandemic on French retail, rose to €140.2 million in 2021. Furniture was again by a large margin its biggest export category; the ‘other furniture’ total was up from €67.4 million to €72.7 million and exports of seats increased from €46.1 million to €49.8 million.

Vietnamese sales of joinery were up from €3.15 million to €5.9 million, other wood n.e.s. from €4 million to €5 million and sawnwood from €2.8 million to €3.47 million. Builders joinery and carpentry products also rose strongly, albeit from a low base, up from €1.2 million in the first ten months of 2020 to €2.7 million in 2021. Builders joinery and carpentry exports rose 26% to €2.3 million.

While its trade with France grew, French IMM survey respondents said obtaining required paper work from Viet Nam remained complex and expressed the hope that the country would start FLEGT licensing.

Hover over the chart to see exact data

France – Viet Nam trade of top 5 wood products since 2019
(3 month rolling averages; HS44, HS47, HS48, and HS94 products)
Source: IMM Data Dashboard

Hover over the chart to see exact data

France – Viet Nam trade 2020-2021
(HS44, HS47, HS48, and HS94 products)
Source: IMM Data Dashboard

Gabon

Gabon’s timber and wood products exports to France in 2021 rose to €72.4 million from €64.8 million in 2020. Veneer sales, driven by recovering demand for plywood in France, particularly from lead manufacturers Joubert, Thébault and Rougier, which all have Gabonese veneer plants, rose from €50.8 million to €54.4 million. Joubert reported record plywood sales in the first six months of 2021 and strong order books going forward, although it did also highlight that demand for tropical plywood in its key market the Netherlands is in decline, with poplar-based product increasingly popular, although held back in 2021 by rising poplar prices. Gabonese sawnwood exports to France were up from €7 million to €10.4 million, and mouldings from €2.2 million to €3.7 million, seen by some French importers as further evidence of Gabonese sawmills ‘evolving to more added value products’. Exports to France of sleepers declined from €2.07 million to €1.59 million and of plywood fractionally from €2.68 million to €2.88 million.

Hover over the chart to see exact data

France – Gabon trade of top 5 wood products since 2019
(3 month rolling averages; HS44, HS47, HS48, and HS94 products)
Source: IMM Data Dashboard

 

Hover over the chart to see exact data

France – Gabon trade of top 5 wood products 2020 – 2021
(HS44, HS47, HS48, and HS94 products)
Source: IMM Data Dashboard

 

Indonesia

Indonesia showed strongest growth in exports to France from the top five leading VPA suppliers with total sales of furniture and timber products up from €61.8 million to €86 million. The best performer was other wood furniture, which following contraction of 7% in the first ten months of 2020 was up for the year from €32.3 to €46.6 millions. Wood joinery exports rose from €10.6 million to €15.6 million, wood seats from €7.9 to €11.6 million, mouldings from €2.7 million to €4.6 million and marquetry from €3.8 million to €3.9 million.

Of survey respondents, 11% said they were importing more goods from Indonesia since the start of FLEGT licensing, while 25% said it had an influence on purchasing decisions.

Some respondents commented that they had switched from imports of Malaysian scantlings to Indonesian, despite the fact the former were available PEFC-certified, as the two products were now on a level in terms of price and they preferred Indonesian products. One said they were buying Indonesian scantlings made in Cameroonian sapele, while demand was reported also to be increasing for Indonesian meranti and palapi decking.

Hover over the chart to see exact data

France – Indonesia trade of top 5 wood products since 2019
(3 month rolling averages; HS44, HS47, HS48, and HS94 products)
Source: IMM Data Dashboard

 

Hover over the chart to see exact data

France – Indonesia trade of top 5 wood products 2020-2021
(HS44, HS47, HS48, and HS94 products)
Source: IMM Data Dashboard

 

Malaysia

French imports of Malaysian timber and wood product declined from 44.39 million in 2020 to €43 million in 2021. Survey respondents said Malaysia was one of the worst affected suppliers in terms of supply chain disruption, the result of particularly slow recovery from ‘prolonged’ covid lockdown which was reported causing a ‘big backlog in mill production’ plus logistics issues, the shortage of containers and consequent sharp rises in freight rates.

As stated, ringgit/dollar fluctuation was also said to be adversely affecting business.

Of the top five export categories, Malaysian sales of other furniture to France were down from €14.5 million to €13.9 million, although wood seats exports rose from €12 million to €13.16 million. Sawnwood exports were roughly static at €5.6 million, while joinery was down from €4.5 million to €4.17 million and other wood n.e.s. from €3.8 million to €2.8 million. One survey respondent said an attraction for them of Malaysia was that mills continued to sell rough sawn hardwood (keruing, kapur and mengkulang), suited for such applications as truck floors, whereas they could only get planed sawn wood from Indonesia.

Hover over the chart to see exact data

France – Malaysia trade of top 5 wood products since 2019
(3 month rolling averages; HS44, HS47, HS48, and HS94 products)
Source: IMM Data Dashboard

 

Hover over the chart to see exact data

France – Malaysia trade of top 5 wood products 2020-2021
(HS44, HS47, HS48, and HS94 products)
Source: IMM Data Dashboard

 

 

Cameroon

French imports from Cameroon rose from €22.6 million in 2021 to €25.2 million in 2021. Despite longer lead times, Cameroonian sawnwood sales increased from €21 million to €22.8 million, of logs from €898,000 to €1.2 million, mouldings from €358,000 to €456,000 and veneer from €165,000 to €298,000.

IMM survey respondents repeated the point made last year that Cameroon remains a key strategic supplier, not only because of its own timber resource and sawn timber capacity, but also as the port of Douala was a ‘gateway for timber production across the Congo Basin’.

Hover over the chart to see exact data

France – Cameroon trade of top 5 wood products since 2019
(3 month rolling averages; HS44, HS47, HS48, and HS94 products)
Source: IMM Data Dashboard

 

Hover over the chart to see exact data

France – Cameroon trade of top 5 wood products 2020-2021
(HS44, HS47, HS48, and HS94 products)
Source: IMM Data Dashboard

 

 

Perception of FLEGT

Trade perceptions and awareness of FLEGT

The IMM survey indicated growth in French trade knowledge of FLEGT and FLEGT VPAs. The proportion of respondents who said they were fully aware of the process remained the same level as 2020 at 40%. However the remainder said they were partially aware, whereas in 2020 7% said they were still unaware.

In terms of a more detailed understanding of the initiative, 27% said they were aware a FLEGT licence indicates that products comply with a range of supplier country laws and regulations. That was down from a third in 2020, however 53% said they were partially aware of this. The proportion who said they were aware a licensed products’ supply chain must be covered by a valid legality or sustainable forest management certificate was down the same percentage, with 47% saying they were partially aware of this. The proportion of those aware that licensing was based on nationwide conformity with a legality standard developed through multi-stakeholder consultation was up from 7% to 14%.

How aware are you of the FLEGT VPA process and what it involves? (n=15)

%

Fully aware

%

Partially aware

%

Totally unaware

Importer’s perceptions of FLEGT licensing

Comments on accepting FLEGT as proof of timber sustainability included that there was a need greater recognition of its sustainability aspects in private and public procurement bodies. However, it was also said that the trade is ‘not looking for extra assurances from FLEGT licensing’ and that the fact it granted exemption from EUTR due diligence was sufficient. What was need, it was said, were more countries starting FLEGT licensing.

Just 7% of survey respondents disagreed with the contention that FLEGT only means ‘legal’ and offers nothing in terms of sustainability, down from 8% last year. But the percentage who agreed was down from 50% to 33%. However the proportion who felt FLEGT Licences should be considered evidence of sustainability in timber procurement policy was down sharply from 58% to 29%, although only 7% were actually against this. The rest were neutral. The majority (40%) said they continued to give certified products preference over FLEGT-licensed, with 20% saying they didn’t, although 54% said they would give preference to licensed timber over non-licensed from competing sources. However, the consensus was that FLEGT did not deliver any market benefit or impact pricing. Among survey respondents’ comments was “it’s a positive initiative, but doesn’t bring us any commercial advantage,”
Most respondents (54%) said French FLEGT Licence processing was efficient and easily understandable, while the same percentage said Licences made importing from Indonesia easier.

survey result 2022 - France