Global market can lead to local uncertainty

6 November 2014

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Earlier in the year, things seemed to be looking brighter for the economies of western Europe and the US, with positive growth figures replacing the negative ones which have been all too common since the economic collapse of 2008.

The US is still producing much-improved figures for growth and this has been reflected in housing growth and, therefore, sales for the panel industry, particularly in structural panels.

However, the green shoots of recovery that were beginning to show through for western Europe now seem to be looking a bit sick. Even Germany, the 'power house' of the region's economies, seems to be slowing down again.

The recovery in the UK was seriously threatened in September by the spectre of the people of Scotland voting to leave the UK and become an independent state. Fortunately, the United Kingdom remains united, so the currency and stock markets, have settled down.

However, there are, of course, serious global issues threatening any economic recovery, probably including that of the US. Armed conflicts in Afghanistan, Syria, Iraq, Palestine and Israel, and, closer to home for Europe, the dispute between Ukraine and Russia, are all making global currency and stock markets jittery.

Russia is one of the few areas in greater Europe that is investing heavily in new panel manufacturing capacity and has certainly become the country to watch over the next two or three years, with new capacities planned in three panel types.

For instance, in Part 1 of our survey of the particleboard industry in this issue - covering Europe and North America - we see that Russia is planning 10 new mills, with a total capacity of 3,180,000m3.

For MDF, our survey showed two new mills in Russia with total additional capacity of 694,000m3.

For OSB, there are eight new mills planned over the next two years, totalling 3,040,000m3. Could there be some question marks over the future of at least some of these lines if the hostilities between Russia and Ukraine continue or even, heaven forbid, escalate, with a resulting increase in sanctions against Russia, at least?

The global economy in which we all live today means that a disturbance in the water in any area results in ripples across the rest of the world. This is alluded to in Bernard Fuller's excellent economic report.

Immediately after this issue has gone to press, I will unfortunately be away from day-today work on the magazine for four to six weeks, for personal reasons. During this time, my colleagues, Derek Steel, deputy and news editor; and Stephen Powney, editor designate, will be managing the editorial side of things on WBPI. Their contact details are in the panel adjacent to this column.

In the meantime, I fervently hope that peace will be achieved in those conflict zones and that economic recovery can be restored.