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Report
from
Europe
No growth in EU economy during 2013
While economic conditions varied across the EU during
2013, the latest European Commission (EC) data indicates
0% GDP growth for the region as a whole during 2013
(Chart 1).
That at least was an improvement on the 0.5% fall in GDP
during 2012. The EC is also now confident that there will
be a return to growth in 2014, albeit feeble at around
1.4%.
 
As a group, the 17 countries of the euro area performed
less well in 2013 than the EU as whole. EC estimates that
euro-area GDP fell by 0.4% in 2013 (after declining by
0.6% in 2012). The EC forecast euro-area growth of 1.1%
in 2014.
The main impetus behind the euro-area‟s forecast recovery
in 2014 will be a significant rise in German growth.
Germany‟s economy probably grew by only 0.4% in 2013,
but GDP is forecast by the EC to increase 1.7% in 2014.
There is also expected to be a modest return to growth in
Italy of 0.7% in 2014 after a decline of 1.9% in 2013.
Similarly, Spain‟s economy is expected to grow 0.5% in
2014 after declining 1.3% in 2013.
Outside the euro zone, the EC expects Sweden and Britain
to do well in 2014, with growth of 2.8% and 2.2%
respectively. However, the strongest growth rates in the
EU in 2014 are forecast to be in the three Baltic States -
Latvia (4.1%), Lithuania (3.6%), and Estonia (3.0%).
Rising confidence in the EU economy is evident from the
significant improvement in the Eurostat Economic
Sentiment Indicator between April and December 2013
(Chart 2). This indicator which draws on a regular
monthly survey of perceptions and expectations in five
sectors (industry, services, retail trade, construction and
consumers) improved across a wide range of EU countries.
European joinery activity stable at a low level
In line with construction output, joinery activity in the EU
remained flat at a low level during 2013 (Chart 3). Only in
Germany was joinery activity being maintained in 2013 at
a level comparable to that of the previous year.
Elsewhere activity hit bottom in the last quarter of 2012
but showed little improvement in 2013. In line with
forecasts for the European economy and construction
industry as a whole, joinery activity across the region is
expected to recover slowly during 2014. Germany is likely
to play a key role in driving this recovery.
Robust growth forecast in German window and door
industry
In 2013, sales of windows in Germany increased 0.9% to
13.1 million units, while sales of external doors increased
1.1% to 1.316 million units. More significant increases in
sales are forecast in both sectors during 2014.
There should be robust growth during 2014 throughout the
German construction sector. This includes new build and
renovation, residential and non-residential. The need to
pursue energy-efficiency measures in the existing building
stock adds impetus to the market. This is a key part of
government plans to meet carbon reduction targets.
These are the main conclusions of an annual survey of the
German joinery sector undertaken by Heinze GmbH, a
market research company, in collaboration of four leading
industry associations.
The survey suggests that in 2013 the weather-related slow
start to the year and capacity constraints were a major
factor limiting higher sales in the German window sector.
Although many manufacturers reported good demand
during 2013, these factors meant they were unable to fulfil
all orders during the year. There is now pent-up demand
which will boost sales of windows in Germany by 5.7% to
13.9 million window units in 2014.
The share of wood windows in the German market is
expected to decrease slightly to 15.3% in 2014. This is
mainly due to a strong rise in market share for
combination wood-metal windows, expected to reach
8.7% in 2014.
However, plastic windows remain dominant and their
market share continues to rise. Plastic windows are
forecast to account for 57.7% of sales in 2014. The market
share of metal windows is projected to remain level at
18.3% during 2014.
In 2014, 65% of window sales are expected to be for
residential construction and 35% for non-residential
construction.
Some 61% of all windows sold in Germany during 2014
are forecast to be used in renovation projects on existing
buildings, primarily for energy efficiency reasons. Sales to
the renovation market are expected to rise 4% in 2014.
The share of windows used in new construction is lower,
expected to account for 38.9% of all sales in 2014.
However sales into the new build sector will grow more
strongly, by 8.4%, during 2014.
German sales of external doors expected to increase
5.7% in 2014
The Heinze survey forecasts that sales of external doors in
Germany will reach 1.39 million units in 2014, up 5.7%
compared to 2013. Growth in sales is forecast to be
distributed evenly across all material types with no change
in market share.
Slightly more than one quarter (25.5%) of external doors
sold in Germany during 2013 were made with wood.
Plastic doors lead the market, accounting for 32.6% of
sales in Germany during 2013. Aluminium doors
accounted for 32.5% of the market in 2013. Other
materials were used for 9.4% of external doors.
The survey notes that demand for both windows and
external doors in Germany during 2014 and subsequent
years will be partly dependent on progress to implement
Germany‟s Energy Saving Ordinances. Since 2002, these
laws have imposed minimum requirements for energysaving
in building construction and renovation.
The requirements (e.g. for U-values of new windows and
doors) have been raised consistently and at shorter and
shorter intervals over recent years. It is uncertain whether
this trend will continue. Also uncertain is the level of
future support for energy efficiency through practical
measures such as tax incentives and low-interest loans to
home-owners.
The priority attached to these measures is now heavily
dependent on the make-up of Germany‟s new government
(particularly the position of the Green party) and their
emphasis on climate change initiatives.
Rise in home building boosts UK joinery sector
A recent increase in residential building starts has boosted
joinery activity in the UK. However concerns remain
about just how sustainable the market upturn is likely to
be.
This is the main conclusion of the British Woodworking
Federation (BWF) latest joinery industry survey covering
the third quarter of 2013 and recently reported in the UK
Timber Trade Journal (TTJ).
The BWFs State of Trade survey indicated that after two
successive quarters where many respondents saw a
decrease in sales volumes, the third quarter survey noted a
balance of 43% of firms reporting an increase.
Manufacturers also remain confident that sales volumes
would improve in the next quarter, with a balance of 52%
predicting an increase this winter, and a balance
predicting an increase over the next year.
The Survey showed that demand remains the most
important restriction on activity. However, demand is less
of an issue than it was. In fact, 20% of respondents now
list capacity as a restraining factor. About two-thirds of
firms said they had used more than 70% of their
manufacturing capacity for the last year.
Capacity utilization was widely anticipated to increase
over the next quarter and year. There are also a small
proportion of companies that are now very busy. 15% of
respondents indicated they are running at over 90%
capacity for the previous year, three times the percentage
of the previous survey.
Looking to the future, the survey showed respondents‟
order books are now more healthy. About three quarters
stated that their order book of future work extends from
between one and three months. 19% of companies
reported a current order book extending beyond three
months, up from only 7% in the previous quarter‟s survey.
Housing figures for the foreseeable future and data
showing a rise in building permits in the UK during the
third quarter of 2013, suggest continued growth in joinery
activity during 2014. However, there are not yet signs of
improving activity in repair and maintenance and in the
commercial and public non-housing markets.
All these sectors remain subdued. Furthermore, margins in
the UK joinery sector are still very thin. Intense
competition for sales means it is difficult to raise goods
prices even while raw material, fuel and energy costs have
been increasing.
Imports only small proportion of EU joinery
consumption
With the exception of flooring products (not covered in
this report), imports contribute only a small proportion of
total EU consumption of joinery products. In terms of
value, only around 4.5% of doors and glulam, and around
0.5% of wood windows installed in the EU are imported
from outside the region.
This is indicative of the very strong commercial benefits
from proximity to the consumer in the joinery sector and
the essential need for detailed knowledge of national
construction markets.
The EU imported wooden doors with total value of €211
million during the first nine months of 2013, 2.9% less
than the same period in 2012 (Chart 4).
The value of wooden door imports from China, the largest
non-EU supplier, fell 7.2% to €67.8 million during this
period.
Imports from Indonesia, the second largest non-EU
supplier, remained stable. Of other major suppliers,
imports increased from Malaysia but declined from Brazil
and South Africa in the first nine months of 2013.
EU imports of wood windows were €19.4 million in the
first nine months of 2013, 16.9% less than during the same
period in 2012 (Chart 5). Most of these imports derive
from other European countries, notably Norway and
Croatia. Imports from China, the largest supplier outside
Europe, were only €1.8 million in the first nine months of
2013, 45% less than the same period the previous year.
In the first 9 months of 2013, EU imported 85,500 m3 of
glulam, 11.9% less than the same period in 2012 (Chart 6).
During the nine month period, there was a significant fall
in imports from Malaysia, Indonesia and Russia, the three
largest external suppliers of glulam to the EU.
Imports from China, the fourth largest external supplier
were at a similar level to the previous year. Imports of
glulam from Vietnam increased slightly. The European
glulam market is currently suffering from saturation, with
too much production chasing limited demand.
Chart 7 provides more detail of recent trends in EU
markets for joinery products imported from China.
Imports of wooden doors from China increased into the
UK and Romania during the first nine months 2013, but
declined into France, Ireland, Belgium and the
Netherlands.
During this period, German imports of Chinese glulam
increased, but this was insufficient to offset declining
imports into UK, Italy, Belgium and Sweden. EU imports
of wooden windows from China have been mainly
destined for France and Poland, both markets which
weakened significantly in 2013.
Hard times drive development of leaner joinery
industry
Over the last decade, the European joinery sector has been
undergoing a major period of transformation. Various
trends that began during the boom years before 2008 have
deepened and become more widespread during the long
period of recession.
Taken together these trends have driven the development
of a sector which is leaner and more high-tech, quality
conscious, customer-oriented, environmentally aware and
ultimately more competitive.
One particularly important trend led by joinery
manufacturers has been the dramatic and far-reaching shift
towards prefabrication. The trend has intensified and
become more widespread during the recession.
It has been driven by a range of factors including
improving technology, tougher quality, waste management
and energy efficiency standards, requirements for longterm
product guarantees, reduced costs of construction,
rising material costs, and high labour costs and skills
shortages.
Processing technologies have advanced rapidly in recent
years and this in turn has fed into significant changes in
other aspects of the industry, such as supply chains, design
concepts and demands for personnel and skills.
To take one prominent example, there is an on-going trend
towards increased use of Computer Numerical Control
(CNC) in the industry.
CNC is helping to overcome the shortage of traditional
carpentry skills in Europe while at the same increasing the
precision and quality of wood components and greatly
reducing waste.
Demand for credible product-specific data
Alongside the development of new processing and data
management technologies, there is an increasing emphasis
on information provision with all materials and products in
the joinery sector.
Manufacturers, construction companies and other
customers increasingly require credible data on the full
range of technical and environmental performance issues.
This data needs to be made available both at point of sale
and as digital downloads on corporate websites.
Joinery manufacturers are now investing heavily in
development of websites providing easily accessible, upto-
date information on their full range of products, as well
as additional information such as advice and care
instructions to technical specifications, certification and
brand values.
Many sites have dedicated trade areas offering
professional support and accurate information about
products in CAD format so they can be inserted directly
into building plans. All these services are seamlessly
linked to information on pricing and with on-line ordering
systems.
The demand for technical performance data in Europe has
been given added impetus by the enforcement of the
Construction Products Regulation (CPR). This dictated
that from 1 July 2013 it is mandatory for manufacturers to
apply CE marking to any construction products covered by
a harmonised European standard (hEN) or European
Technical Assessment (ETA).
Such standards already exist for a wide range of joinery
products including windows and external doorsets (EN
14351) and traditionally designed prefabricated stairs
made of solid wood (EN 15644).
Additional harmonised standards, for example covering
internal pedestrian doorsets (EN 14351-2) and fire door
performance (prEN16034), are expected to be published in
2014.
Requirement for comprehensive environmental
information
The need for performance data includes coverage of the
environmental issues. There‟s much focus in the timber
industry on forest certification and illegal logging laws
like EUTR. However the demand for environmental
information now goes much further than this.
In the windows and doors sectors, demonstrating
conformance to minimum energy efficiency standards has
become critically important. This has driven numerous
innovations in product design, many of which have
benefitted the timber sector.
For example, a recent article in the TTJ includes the
following quote from a representative of Skaala, a Finnish
company which is a leader in production of very highly
energy efficient windows including one model with a Uvalue
of 0.58 W/m2K:
“Timber turned out to be an extremely competitive
material compared to expensive and difficult to work with
plastic composites despite its structural strength being
slightly lower…[timber] is in a class of its own when it
comes to the combination of thermal insulation and
recyclability, so the goal was to maximise the amount of
timber in the product structure.”
Life cycle inventories being established
Meanwhile, developments in information technology are
combining with the evolving science of Life Cycle
Assessment (LCA) to offer a path towards integration of
real environmental performance into key stages of joinery
product design.
European governments and commercial companies
specialising in LCA are now building comprehensive
“Life Cycle Inventories” containing verifiable quantitative
data on the use of the world‟s resources and outputs of
emissions and pollutants.
At the same time, there has been significant progress to
standardise the process of LCA to ensure comprehensive
coverage of impacts and consistent results. The process is
now subject to the ISO14040 series of international
standards.
A global framework is emerging for issue of
Environmental Product Declarations (EPDs) to
communicate data on individual products to consumers.
At European level, the CPR requires use of EPDs to meet
standards for environmental performance for construction
products in all Member States.
The EU has published EN15804 to provide core rules for
construction product EPDs.
These developments mean that competitiveness in material
supply to the joinery sector is becoming increasingly
dependent on provision of the full range of environmental
data to manufacturers.
Wood suppliers are now responding by broadening the
emphasis of their environmental communication to
encompass LCA alongside existing messages on forestry
and carbon.
For example, the American Hardwood Export Council
(AHEC) has just launched an on-line system allowing
AHEC member companies to issue “American Hardwood
Environmental Profiles”.
The aim is that the profiles will be delivered as part of the
standard shipping documents with every consignment of
US hardwood supplied by AHEC members into the EU.
Each profile includes the data needed by EU importers to
demonstrate EUTR conformance. It also includes data on
forest sustainability and life cycle environmental impacts
(including carbon footprint) of the US hardwood species
in question.
The signs are that the timber trade and industry, driven by
intense competitiveness, is responding well to these new
demands. In fact, the timber sector is playing a leadership
role by challenging manufacturers and other material
suppliers to improve the quality and environmental
performance of their own products.
This was evident, for example, from comments made by
Hugh Pearson, Editor of the journal of the Royal Institute
of British Architects on the occasion of the UK Wood
Awards held in London in November.
He observed that there is “no need to make the case for
wood in architecture anymore, given timber‟s proven
durability, technological advances, aesthetic possibilities
and environmental credentials”.
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