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Italian imports tumble
While the overall value of Italian imports of most hardwood products between January and
September 2001 (see statistics) was comparable to the previous year, the nine month data
masks a significant fall in imports after June 2001. Italian imports of nearly all
hardwood products were very buoyant in the first and second quarters of 2001. However,
comparing the third quarter of 2001 with the third quarter of the previous year, there was
a significant fall in the value of imports of most products including tropical logs (down
6%), beech logs (down 44%), oak logs (down 15%), other temperate logs (down 13%), tropical
lumber (down 19%), beech lumber (down 36%), oak lumber (down 6%), other temperate lumber
(down 9%), and temperate hardwood veneers (down 16%).
Protracted summer slowdown
The scale of the decline during the third quarter indicates that the traditional Italian
summer slowdown was unusually protracted during 2001. The downturn also mirrors
developments in Italy¡¯s economy. There was reasonable optimism
at the start of 2001 as the economy seemed to be bouncing back after some difficult years
and with many businessman looking forward to the full replacement of the lira with the
euro at the start of 2002. However confidence was dented during the second half of 2001 as
the global economy cooled. The scale of turnaround is reflected by a 2.6% fall in Italy¡¯s industrial production during November 2001, the biggest monthly decline in
nine years.
Furniture sector slows
Activity in Italy¡¯s furniture sector, the largest in Europe
and an important consumer of hardwoods, has been slowing since the middle of 2001. A study
by the Economic Studies Centre of Cosmit/Federlegno Arredo indicates that in the first 6
months of 2001, production by the Italian wood furniture sector was up 3.8% on the same
period the previous year. This compares with 6.2% growth during the whole of 2000. The
Italian furniture research organisation, CSIL, now forecasts that Italian furniture
production will grow by less than 2% during 2002.
Although a reduction in interest rates coupled with modest inflation is helping to bolster
Italy¡¯s domestic furniture demand, the sector is struggling to
maintain the strong sales experienced over the last three years. Like other European
countries, Italy¡¯s furniture sector is having to cope with
increased competition from overseas suppliers. Italy¡¯s imports
of wooden furniture during the first nine months of 2001 were up 10% by value compared
with the same period the previous year. Imports from Romania, Switzerland, and Austria
were particularly strong. Unlike other European countries, Far Eastern manufacturers have
yet to make a significant impact in Italy¡¯s domestic market.
Overseas furniture sales down
However the situation is different on export markets. Overseas sales of Italian furniture
have weakened due to slowing demand and intensifying competition both from the Far East
and Eastern Europe. In an effort to steer off the threat of competition from low wage
countries, Italian furniture manufacturers are now actively seeking partners for the
development of joint-initiatives in these countries, particularly in Eastern Europe.
Italian furniture manufacturers are also responding with increased marketing efforts.
Prospects in Italy for 2002 now look more encouraging. In late February it was reported
that the ISAE Index of Italian consumer confidence rose to it¡¯s
highest for almost 12 years. The Italian retailers¡¯ association
Confcommercio, is forecasting that Italy¡¯s GDP will rise by
1.2% in 2002 and by 2.2% in 2003. Economic recovery is expected to start from the second
half of 2002 and to be brought about by a rise in both consumer spending and exports. The
Economist Intelligence Unit forecasts that "by 2003 the economy should be performing
close to its full non-inflationary potential."
The import figures reveal some important shifts in the Italy¡¯s
sourcing of hardwoods. Italy remains a major importer of tropical - primarily African -
logs, but import volumes are in decline as primary processing operations are shifting to
tropical countries. Restrictions on the export of Cameroon logs have led to an increase in
Italian log imports from the Central African Republic, Liberia and Congo (Brazzaville).
The recent announcement that Cameroon¡¯s export ban will extend
to ayous, a species popular in Italy, will intensify this trend during 2002. Italy¡¯s tropical sawn lumber imports were reasonably steady during 2001, partly
compensating for the decline in log availability. Cameroon has now replaced Ivory Coast as
the leading supplier of sawn lumber to Italy, although Italian imports from both countries
were on the rise during the first half of last year. Sawn lumber imports from Indonesia
declined last, due to the ban on exports of ramin and a general decrease in availability.
Big decline in beech imports
Considering temperate hardwood imports, the most noticeable trends are the big decline in
beech imports, both logs and lumber, and the rise of Eastern European countries, notably
Croatia, in the supply of logs and lumber to Italy. The fall in beech imports between 2000
and 2001 is perhaps slightly misleading since trade levels were unusually high in 2000
following the storms in Central Europe during December 1999. However this trend is also
likely to reflect underlying problems of over-stocking in the European beech market last
year.
Italian imports of oak logs and lumber held up better than beech last year, partly
reflecting the fashion for oak in the European furniture sector. Last year, Italian
imports of temperate hardwoods from Croatia, and to a lesser extent Romania and Russia,
were expanding at the expense of the USA, France and Hungary.
Europe¡¯s largest veneer importer
Given the importance of Italy as a supplier of furniture, it is hardly surprising that
Italy is Europe¡¯s largest importer of veneer. Italy¡¯s imports of hardwood veneer were strong during the first half of 2001, but
there were signs of a slow-down during the second half. Veneer imports from Ivory Coast
and Ghana were rising last year, a trend which reflects a partial shift in veneer
production away from Italy to tropical countries. Veneer imports from the United States
also rose strongly during the first six months of the year, but slowed between June and
September.
Italy¡¯s plywood imports were on the rise last year, with
significant gains being made by suppliers of tropical plywood in Gabon and Morocco, and
suppliers of birch and beech plywood in Latvia, Romania and Slovakia.
Compared to many Northern European countries, Italy is not a significant importer of
joinery products. However last year there were signs of increase in imports of door
components, notably from Romania, and window components, particularly from Switzerland.
Italy¡¯s imports of parquet panels were reasonably stable
during the first half of 2001, but began to decline in the second half of the year.
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