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Chapter 1 Overview of forest products markets and policies
1.1
INTRODUCTION
The 2015 edition of the UNECE/FAO Forest Products Annual Market Review provides a comprehensive review of market developments in the UNECE region in 2014 and the first half of 2015 and of the policies driving those developments. The UNECE region comprises three subregions: Europe; the Commonwealth of Independent States (CIS); and North America. It encompasses Canada and the United States of America (US), Europe, the Russian Federation, the Caucasus and the Central Asian republics. It includes almost all boreal and temperate forests in the Northern Hemisphere and covers about 1.7 billion hectares, which is just under half the world’s total forest area. The Review serves as a background document for the joint session of the UNECE Committee on Forests and the Forest Industry and FAO’s European Forestry Commission, which will take place on 2-5 November 2015 in Engelberg, Switzerland. This chapter constitutes an executive summary by providing an overview of the other ten chapters of the publication. Section 1.2, which follows this section, provides background on the macroeconomic health of the region. The effects of the economy are further elaborated in chapters 2-11, which outline the impacts of the economic situation on particular sectors and geographical regions. Chapter 2 provides background on the policies and market tools that are influencing the forest products sector, including those related to trade, energy and the environment (e.g. certified forest products, carbon accounting and markets, and green building). Chapter 3 is a special chapter on institutional forest ownership and its effects on forest product markets. Chapters 4-10 cover the major forest product sectors. Chapter 11, on housing (a leading driver of wood consumption in the UNECE region), concludes the publication. The Review presents and analyses the best available annual statistics for the period 2014-2015 collected by the UNECE/ FAO Forestry and Timber Section from official country statistical correspondents and expert estimates. Note that the trends discussed in this publication comprise a mix of data from the UNECE/FAO TIMBER database (presented for the UNECE region as a whole and for each of the three subregions) and author-provided data, which may be derived from various sources, including the authors’ own market intelligence. A strong effort has been made to reconcile data and trends, but occasionally small differences arise between sources. Additionally, authors may sometimes present trends or data for different geographic aggregations than the standard UNECE subregions. References to “Europe”, the “CIS” and “North America” in this publication always pertain to those subregions, however.1
Electronic annexes2 provide additional statistical information, and the full UNECE/FAO TIMBER database, which was updated with statistics from national correspondents in July 2015, is also available on the web.3 These comprehensive data, which form the basis of many of the chapters, ensure the transparency of the Review. References at the end of each chapter give credit to the sources of information and provide further reading. A common thread in this 2015 edition of the Review is the analysis of markets outside the region. Forest products are increasingly traded at the global level, with pronounced effects on markets inside the UNECE region.
1.2
ECONOMIC DEVELOPMENTS WITH IMPLICATIONS ON THE FOREST SECTOR
The world economy continued to expand modestly in 2015, although there were sharp variations in growth rates and economic prospects, including among countries in the UNECE region. The decline in oil prices has supported the global recovery but also contributed to the divergence of growth rates. For a number of energy-exporting economies in the CIS, notably the Russian Federation, weaker oil prices have caused a significant economic shock. After the global financial crisis in 2008, growth restarted earlier in the US than in the advanced European economies and has continued at a faster clip. Expansion rates in North America will continue to exceed those observed in western Europe in 2015-2016. Nevertheless, the gap is narrowing as the pace of growth increases in the euro area, where, after years of austerity, fiscal policy has become less of a drag on economic activity. The economic expansion in the euro area is now more broad-based, but significant differences in performance remain. There has been rapid growth in European Union (EU) countries outside the eurozone, a pattern that will continue in 2015-2016. The improved economic performance in the new EU member states in central Europe has been driven by the new dynamism in the euro area, stronger domestic demand, and the use of EU structural funds. Countries with economies in transition have fared worse, with structural factors holding back the recovery in southern and eastern Europe. The falling price of oil was the main factor affecting economic performance in the Russian Federation in 2014 and early 2015, but economic sanctions imposed by Europe and the US in 2014 increased the cost of financing and undermined confidence. Diminished economic prospects in the Russian Federation, which is the largest economy in the CIS, had a negative impact on other countries in that subregion through reduced trade, investment and remittances. In the Ukraine, the conflict in the east and contractionary policies are severely depressing economic activity. As a result of these 2 3
www.unece.org/forests/fpamr2015-annex www.unece.org/forests/fpm/onlinedata