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Report from
Europe
Low consumer confidence depresses EU economic
sentiment
According to the latest business and consumer survey
from the EU Directorate of Finance and Economic Affairs,
EU economic sentiment declined in September. The
decline in the ESI resulted from lower confidence among
consumers, despite higher confidence in industry and, to a
smaller degree, construction. Confidence in services and
retail trade remained broadly stable.
Among the biggest EU economies, the ESI fell markedly
in France, down 1.7 points, and Italy saw a 0.8-point fall.
More positively, the ESI rose significantly in Spain, up 3.4
points underlining the fact that the Spanish economy is
one of the best performing in the EU. For Germany it was
up 0.6 and the Netherlands 0.5 points.
EU industry confidence persisted on its recent upward
trend, rising 1.0 points. This was attributed to ‘sizeable
improvements in managers’ production expectations and
assessments of current levels of overall order books. At
the same time, managers’ assessment of finished products
stocks worsened noticeably, although their assessment of
past production improved and views on export order books
also turned less pessimistic.
Consumer confidence was down 0.8 points, with
deterioration in their views on their household’s future
financial situation, expectations about the general
economic situation in their country, and their intentions to
make major purchases.
Construction confidence rose 0.5 of a point, with an
improvement in employment expectations in the sector,
despite weaker assessment of order book levels.
The Economic Uncertainty Indicator (EUI) increased by
1.2 points to 18.4, breaking a four-month fall. Uncertainty
about the future business situation increased in services
and industry but decreased in construction and in retail
trade. Consumers’ uncertainty about their future financial
situation was up.
See: https://economy-
finance.ec.europa.eu/document/download/60c46029-7f60-40f0-
b8ef-a9ca8aa46aae_en?filename=bcs_2026_09_en.pdf
Middle East war drives EU inflation
The Middle East conflict will result in a protracted
inflationary shock in the EU according to the latest
outlook from analyst Ernst & Young (EY). It states that oil
and European gas are now 50% above pre-conflict levels.
Fertilizer prices are also up sharply. Food commodity
prices are up less significantly but are expected to increase
further. Disrupted sea freight have also driven a sharp rise
in the Global Supply Chain Pressure Index.
According to EY, higher fuel prices have already added
over 1 percentage point to euro area inflation. Business
and consumer sentiment has also worsened.
Euro area Inflation is now projected to be higher by 1.2
percentage points in 2026 and 0.7 percentage points in
2027, driven by the conflict’s impacts on electricity, food,
and core goods prices
See -https://www.ey.com/en_lu/insights/economics/ey-european-
economic-outlook-june-2026
and
https://ec.europa.eu/eurostat/web/products-euro-indicators/w/3-
01102026-ap
European Commission timber sector survey underway
The Joint Research Centre (JRC) of the European
Commission has undertaken a survey of the timber sector
to improve understanding of wood-based value chains
across forest-based industries. Results will be used in
scientific analysis and modelling to produce a forest sector
outlook study, which may help shape future European
legislation affecting the sector.
“Current data and information are often not sufficiently
representative of today's industrial practices and recent
technological developments,” said Diego Benedetti,
European Organisation of the Sawmill Industry (EOS)
Economic Affairs Director.
“To address these knowledge gaps, the JRC has engaged
with industry representatives and sector associations
through a survey. The information collected will be
aggregated and used to enhance the representation of
forest-sector value chains in the modelling framework.”
The survey for the study contained general questions
participating companies and industry bodies on their
activities, markets, and expectations, with respondents
asked for high-level estimates, ranges, averages, and
expert judgement.
They were also invited to give more detailed quantitative
information on input and output in roundwood equivalent
volumes or other units, where available.
The EOS asked its participating members to share their
answers with it so it could collect and collate all data and
send a collective input representing the organisation.
See:
https://ec.europa.eu/eusurvey/runner/technical_coefficients#page
0
https://eos-oes.eu/
Spanish trade busy but cautious
Business is stable currently in the Spanish timber sector,
but there is some uncertainty over whether this can be
maintained in coming months, according to feedback from
the directors of timber trade association AEIM.
The Board of Directors met at the Forest Science and
Technology Centre of Catalonia Timber Hub in Solsona
on September 23. The consensus was that trade was
following a steady course, but that there were signs of
increasing competitive pressure and growing, albeit still
moderate, caution about the outlook.
Directors discussed market trends over the first half of the
year and prospects for the second half. A real-time survey
of views was taken and the resulting trade ‘barometer’
showed 91% of participants concluding that business
levels during the first half of the year were approximately
level with the same period of 2025.
On profitability 55% reported that margins have remained
steady, with 27% seeing an improvement and 18%
experiencing a slight decline.
The key contrast with 2025 was the level of competitive
pressure. Many participants, 64%, said competition had
increased compared to the previous year. Inventory levels
remain virtually unchanged for 55% of respondents,
However, 82% reported that unpaid debt levels were
similar to those of 2025, while 55% said inventory levels
were virtually unchanged.
As for the pace of commercial activity, 36% report a
reduction in requests for quotes and inquiries, against 55%
who saw no significant changes.
During the second half of 2026, 73% felt sales would
continue to equate with those of the same period in 2025.
But 18% anticipated a decline of up to 10%, and only 9%
expect growth of up to 10%.
Business development is increasingly focused on use of
new technologies. Only 9% of survey respondents are
planning to increase their workforce, with 27%
considering plant expansion and machinery investment.
But 91% were looking at increasing implementation of
digitisation and new software and use of AI. In addition,
73% intend to further diversify their product offer.
“Overall, the Barometer reflects a sector that is
maintaining its business levels but approaching the second
half of 2026 with caution, amidst heightened competition
and signs of a potential demand slowdown,” concluded
AEIM.
See: https://www.aeim.org/index.php/2026/09/24/junta23sep/
Stefano Corà is now Fedecomlegno president
The Presidential Council of Italian timber trade federation
Fedecomlegno (part of FederlegnoArredo) has elected
Stefano Corà as President for 2026–2030. The federation
represents timber importers, traders, and agents dealing in
raw timber, semi-finished products. Mr Corà’s says his
aim in office is to support companies across sector as they
navigate a market environment defined by new regulatory,
financial, and commercial challenges.
Mr Corà has had a 30-year career in the timber industry.
For nearly two decades, he has also played an active role
in Fedecomlegno, serving as vice president from 2008 to
2014 and again from 2020 to 2026, as well as sitting on
the Presidential Council and General Council of
FederlegnoArredo.
See: https://www.federlegnoarredo.it/press/fedecomlegno-
stefano-cora-e-il-nuovo-presidente
Timber could halve Danish new build emissions
If timber-based buildings replaced conventional concrete,
brick and steel new construction in Denmark it would save
almost one million tonnes of CO₂ equivalent emissions a
year. This is the finding of a new study from Aalborg
University. It compares two possible pathways for Danish
new construction up to 2050. It covers eight building
types, including residential, offices and schools, together
accounting for around 86% of new build floor area in
Denmark.
According to the researchers’ model, building sector
annual emissions would fall from 2.03 to 1.04 million
tonnes of CO₂ equivalents in a scenario of a complete
switch to timber-based construction in 2025.
A gradual transition towards 2050 delivers smaller
savings. But even with these substantial emissions savings,
switching to timber alone would not be enough for
Denmark to stay within its allocated share of the global
carbon budget, according to the Planetary Boundaries
framework.
Where the timber comes from matters the research
concludes. Using more timber puts the spotlight on how it
is sourced and used. The climate benefits need to be
assessed alongside forest management, land use and
biodiversity. “More wood is not automatically better; it
matters where it comes from, how forests are managed and
how efficiently the resource is used,” she said.
In the study, a building is classed as timber-based when at
least half of its structural components are made of timber.
The projections draw on life cycle assessments of 16
actual buildings: one timber-based and one conventional
building for each of the eight building types. The results
were combined with projected construction activity in
Denmark from 2025 to 2050.
See : https://link.springer.com/article/10.1007/s44498-026-
00159-0
https://www.stockholmresilience.org/research/planetary-
boundaries.html
BMRC forest systems framework development
continues
The Broader Market Recognition Coalition (BMRC) has
further advanced development of its modular framework
for members’ National Forestry Systems (NFS). It is also
developing its market research activities.
The BMRC, launched in 2023, comprises six members,
Cameroon, Ghana, Guyana, Indonesia, Liberia and the
Republic of the Congo. They have undertaken to develop
their NFS and have them independently validated against
internationally accepted good forest governance principles
and indicators.
The objective is then to promote and communicate these
systems to support access to markets globally and increase
trade in member countries’ sustainably and legally
produced timber and wood products.
This, in turn, is intended to incentivise further
development and strengthening of NFS. It’s also to
encourage wider international implementation of such
systems and attract more countries to join the BMRC.
The Modules Working Group, comprising representatives
of member countries, has held three meetings recently to
further develop the parameters of the BMRC modules
framework. This will describe and demonstrate the key
elements of NFS. Nine interconnected Modules are being
developed covering legal frameworks, verification,
traceability, national reporting, transparency and
independent monitoring, independent audit, enforcement,
stakeholder participation, and continuous improvement.
“The Modules are designed to recognise the diversity of
national approaches while providing a common basis for
describing how systems operate and demonstrating their
credibility,” says the BMRC. “They are not intended to
impose a single model of forest governance on
participating countries.”
Following consultation on the initial Modules, the
Coalition is now moving into a practical country
application phase.
Participating countries will apply selected Modules to their
own national systems to identify what works well, what
may require clarification, and where further guidance
could be useful. The findings will inform the next stage of
development and discussions at the Coalition's meeting in
Bali in December 2026.
The BMRC is also looking to establish a Markets Working
Group to review the latest trade trends and collectively
think through possible options to ‘increase access to
timber, forest products and climate finance markets and [to
capitalise on] recognition opportunities’, reports the latest
BMRC newsletter.
In another initiative to boost the BMRC’s profile, Sonya
Kusumadewi, BMRC National Consultant to Indonesia,
gave a presentation on the Coalition’s mission to the Like-
Minded Countries Alliance (LMCA). At the event in
Bogor, Ms Kusumadewi described the objective as
advancing forest governance through South-South
cooperation.
“The exchange generated interest in the BMRC’s work
and explored opportunities for future collaboration,
including Like-Minded Countries engaging with the
BMRC as observers, strategic partners or future
members,” states the BMRC newsletter.
The BMRC received seed funding from the Forest
Governance, Markets and Climate programme of the UK
Foreign, Commonwealth & Development Office (FCDO),
with Timber Development UK initially providing the
secretariat. At the start of this year the secretariat
transferred to the new International Forest Governance
Hub in Edinburgh, set up by the European Forest Institute.
See: https://mailchi.mp/efeca/bmrc-newsletter-july-
august?e=a90834b3ec
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