European Parquet Market: Between High Demand and Tight Supplies

European Parquet Market Main Image
PHOTO COURTESY OF NWFA

The European Federation of the Parquet Industry (FEP) estimates that, after a stable year in 2020, the European consumption of parquet rose by 5.8 percent in 2021. FEP underlines that this is a first projection subject to variations, in anticipation of the complete data to be communicated in June during its 66th General Assembly & 46th Parquet Congress in Hamburg, Germany.

High Demand

Consumption of parquet has increased in all European markets, especially during the first semester of 2021, compared to the same period in 2020. Throughout the rest of the year, demand continued to grow, but at a slower pace as consumers began spending again in areas such as leisure and travel, which were limited during the pandemic. Nevertheless, renovation and adaptation of homes to “post-COVID-19” life remains the driver of the parquet consumption growth.

FEP LogoThe results show variations from country to country, reflecting the evolution of the pandemic and the related governmental measures in the different European member states in 2020 and 2021.

Countries such as France and Italy, which were not able to offset the loss experienced during the spring 2020 lockdown and reported declines in parquet consumption for the year 2020 as a whole, are showing the largest increases in parquet consumption in 2021 compared to 2020.

In contrast, countries that totally or partially compensated for the bad performance observed in March-April of 2020 during the second half of the same year generally reported lower but still sustained increasing rates for 2021. This is the case for Austria, Germany, Scandinavia, and Spain, while the Swiss parquet market shows a significantly higher progression rate.

All member states now are back or even beyond consumption levels of 2019, and demand is continuing to progress.

Tight Supplies

It is sometimes difficult to fulfill orders on time as the issue of raw wood material supply – availability and affordability – remains acute. Supplies of glues, lacquers, and now staggering energy costs also are hampering the positive evolution of the European parquet markets. Logistics and freights also are an issue, as shortages of skilled labor forces for manufacturing and installing parquet increasingly are reported by operators.

Raw Wood Material Stock Photo
PHOTO COURTESY OF NWFA

The pandemic and its impact on everyday life are supporting a strong demand for wood (renovation, DIY, packaging). This trend is expected to continue, although office spaces will be reduced, as the use of wood in construction and in a number of other applications is increasing.

The European Union also is supporting the demand for long-life wood products by translating the principles of its European Green Deal (a large strategic plan aimed at reaching carbon neutrality by 2050) into concrete measures to be implemented as soon as possible. The European Union could reward long-term carbon storage in long-lasting harvested wood products (for instance, biogenic carbon in construction products that substitute greenhouse gas-intensive conventional materials) with a certification mechanism of carbon removals.

There is a shortage of raw wood material. The main question here is how long the tight supplies situation will last, and if this will be the new cost level, or if it will keep going up. It is a difficult question, and experts disagree on it. Some forecast that equilibrium will be reached in a few months, during the 2nd quarter of 2022, but that costs could remain high.

Other Green Deal initiatives that boost wood demand are the Renovation Wave, the new Circular Economy Action Plan, Sustainable Carbon Cycles, and revised Energy Performance of Buildings Directive.

On the other hand, there is a shortage of raw wood material. The same European authorities are about to limit wood harvesting through their new Biodiversity Strategy. Wood, even damaged by the bark beetle, is exported massively to China (according to China Customs, log imports in the first half of 2021 amounted to 31.26 million m3 valued at US$ 5.265 billion (CIF), up 29 percent in volume and 48 percent in value). Bans of exports from Russia and a few other East-European countries are worsening the situation of wood availability directly and indirectly by forcing China to buy in Europe. Additionally, the U.S., which also experiences a strong wood demand, is turning to Europe for its supply.

More specifically, the availability of oak logs in Europe will remain low in the future, and costs will keep increasing. While product replacement will take place in some other sectors like railways and gardening, the flooring industry will remain a top buyer of oak after the barrel and the veneer industries. There is no easy solution as no other hardwood is as abundant as oak. However, there is a need to start educating customers about products that will be available in the future (species, knots, colors, and widths).

The main question here is how long the tight supplies situation will last, and if this will be the new cost level or if it will keep going up. It is a difficult question, and experts disagree on it. Some forecast that equilibrium will be reached in a few months, during the 2nd quarter of 2022, but that costs could remain high.

FEP and the whole European parquet industry are looking for the European authorities to consider this raw material issue and take relevant measures. This is paramount if those authorities want wood products to effectively play their positive role and tackle climate change by storing CO2.

Isabelle Brose is the managing director of the European Federation of the Parquet Industry (FEP), located in Brussels. The FEP reunites European national parquet federations, parquet manufacturers and suppliers to the industry. Contact the FEP at info@parquet.net or by visiting parquet.net.

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