Archive:Forest-based industries
- Data from March 2008, most recent data: Further Eurostat information, Main tables and Database.
This article analyses the structure, performance and evolution of the forest-based industries (wood and wood products, paper and pulp, printing) in the European Union (EU). These industries, downstream of the forestry sector, use wood as raw material, which is one of the few resources that is both renewable and recyclable. Forest-based industries are present in all EU Member States, but in some they are particularly important, based on long traditions and major employers within the manufacturing sector.
A separate section, in addition, focuses on the related activity of furniture manufacture.
Main statistical findings
In 2005, the EU's forest-based industries included around 350 000 enterprises employing almost 3 million people. Generating a turnover of EUR 380 billion, they produced a value added of EUR 116 billion. The small enterprises active in these industries account for 15.1 % of the manufacturing (NACE D) business population. The number of people employed by forest-based industries was 8.6 % of the total manufacturing workforce. In terms of output, these industries contributed 8.6 % of total manufacturing turnover yet only produced 7.1 % of value added.
_and_furniture_manufacturing_(NACE_DN36.1),_EU-27,_2005.PNG)
The percentage shares in manufacturing of four main indicators are shown for the three main subsectors in Graphe 1; the related activity of furniture manufacturing is included for comparison. Wood and wood products, printing and furniture all display a similar profile. All have a relatively higher share of the enterprises in manufacturing and a higher share of employment than that of value added. In contrast, paper and paper products shows a lower share of enterprises than its share of people employed, but the largest share of value added. This shows the dominance of large enterprises in this subsector, reflecting the apparent higher labour productivity that is common for processing industries.
Table 1 presents the main indicators for forest-based industries in the EU Member States and Norway. In 2005, in the EU's forest-based industries, five Member States (Germany, United Kingdom, Italy, France and Spain) accounted for over half the number of both enterprises and people employed, as well as around two thirds of the turnover and value added. However, their contributions were smaller in this sector than those made to the manufacturing one, where they accounted for around three quarters of the turnover and value added. In comparison, in Latvia, Estonia and Finland, the proportional contributions to the value added of EU forest-based industries were more than double those they made in manufacturing.
In 2005, the EU forest-based industries had average labour costs of EUR 29 100. They were highest in Germany (EUR 45 200), Sweden and Finland, and lowest in Bulgaria and Romania. Note that a country's specialisation influences its average personnel costs, as higher wages are generally paid in the processing industries, such as pulp and paper production.
Apparent labour productivity (value added per person employed) in EU forest-based industries was EUR 38 700. It was highest in Finland (EUR 68 700), Ireland and Belgium, and lowest in the ten central-European Member States.
Wage-adjusted labour productivity (the relationship between apparent labour productivity and average personnel costs) was 133 % in the EU. It reached its highest level in Latvia (256 %) and was close to, or above, 200 % in Poland, Slovakia, Bulgaria and Romania. This indicator was lowest in the Netherlands, Norway, France and Germany.
The gross operating rate (the share of operating surplus in turnover), which is another profitability indicator, was 9.9 % in the EU's forest-based industries. It was highest in Greece (21.6 %), Poland, Latvia, Ireland and the Czech Republic, and lowest in France, Norway and Slovenia.
The importance of the forest-based industries to the Member States’ manufacturing sectors in 2005 is shown in Graph 2. The most specialised countries in this sector have the highest value added (as a share of their total manufacturing). These were Latvia (25.7 %), Estonia (18.4 %) and Finland (16.6 %), and they also have the highest employment shares (23.8 %, 18.1 % and 17.9 % respectively).
In 2005, in Latvia, Estonia and Finland, the proportion of the 'Total land area' that was 'Forest and other wooded land' amounted to 49.3 %, 55.8 % and 76.5 % respectively, compared to the EU average of 42.2 %.
A breakdown of the subsectors making up EU forest-based industries in 2005 is given in Table 2. While 43 % of people were employed in producing wood and wood products, they generated only 30 % of the value added. Pulp (DE 21.11) displayed the highest wage adjusted labour productivity (210 %) while other activities related to printing (DE 22.25) had the highest gross operating rate (18.8 %).
The Member States’ specializations in the forest-based industries are shown in Graph 3, which shows the distribution of value added according to the three main subsectors. The share of value added for wood and wood products was highest in the three Baltic states of Latvia (84 %), Estonia (76 %) and Lithuania (73 %), and these shares were over twice the EU average (30 %). The three Member States in which pulp and paper contributed the highest share of value added were Finland (61 %), Sweden (53 %) and Slovakia (50 %). The share of printing in the total value added was highest in Greece (60 %), the United Kingdom (52 %), the Netherlands (45 %) and Ireland (44 %).
Employment by enterprise size class
The distribution of the forest-based industries’ labour forces according to the enterprise size classes are compared to that of manufacturing in Graph 4. The classes are:
- micro (1 to 9 employees)
- small (10 to 49)
- medium (50 to 249)
- large (above 250)
In all manufacturing, higher shares of the workforce were employed in large enterprises, while employment in forest-based industries was distributed fairly evenly among the four size classes. However, the picture is different when looking at the size-class distribution of employment in the forest-based industries’ three subsectors.
In 2005, within the manufacturing industry and on the NACE division level, wood and wood products (DD 20) and SMEs (micro, small and medium-sized enterprises), had the second-highest share in terms of the number of people employed (84.4 %) after recycling (DN 37), which had 88.5 %. In wood and wood products, and in printing, over 61 % of people were only employed in the micro and small enterprises, as compared to 34.5 % in total manufacturing.
In contrast, in pulp and paper, 79.0 % of the workforce was employed in large (47.0 %) and medium-sized enterprises (32.1 %) and only 5.2 % in micro enterprises. This size-class distribution is typical for enterprises in processing industries, where large production installations are predominant.
Individual Member States’ size-class distributions in the forest-based industries reflect their specializations in the different subsectors. While the proportion of people employed in medium-sized and large enterprises was 48.3 % in the EU, it was highest in Germany (59.0 %) and lowest in Italy (26.8 %). Germany’s high share of medium-sized and large enterprises is linked to a relatively strong specialization in pulp and paper. Similarly, in Finland (2004) and Sweden, which are pulp and paper specialists, the share of people only employed by large enterprises was particularly high, at 63.7 % and 44.2 % respectively, as compared with the EU average (2005) of 22.2 % in forest-based industries.
The evolution of the production of wood and wood products and pulp and paper more or less followed the general trend in manufacturing between 2000 and 2007. However, wood and wood products underperformed somewhat. While manufacturing stagnated between 2000 and 2003, wood and wood products and printing and related services receded. Wood and wood products rapidly regained momentum after 2002, while the production of printing and related services stagnated over the same period. This may be attributed to strong competition from the new electronic media, especially the Internet. The production of pulp and paper grew after 2001, only witnessing a downturn from 2004 to 2005 that may be related in part to a slowdown in exports (see Graph 6).
Foreign Trade
The EU foreign trade in forest-based industry products grew strongly from 2000 to 2007 and, in particular, during the last three years of that period, as shown in Graph 6. In 2007, total exports reached EUR 125.8 billion and imports EUR 114.8 billion. Underlining the internal market’s importance for these bulky goods, a much higher share of foreign trade was carried out intra-EU: 78 % for imports and 75 % for exports. Intra-EU exports consisted in large part of pulp and paper (63 %) and wood and wood products (31 %). Extra-EU exports by subsector had similar proportions. Imports from extra-EU consisted mostly of pulp and paper (48 %) and wood and wood products (48 %). Both in intra- and extra-EU trade, the low amounts of printing products reflect their local nature, linked to language differences and to the need for rapid delivery of the end product - for example newspapers and magazines.
The EU's main partners for extra-EU forest-based industry exports were USA (11 % of total), Switzerland (11 %) and Russia (10 %). The USA was the main client for wood and wood products and the second largest customer for both pulp and paper and printing.
The EU's main import partners for forest-based industry products were China (15 %), USA (14 %) and Brazil (11 %). China was the main supplier of wood and wood products and of printing products.
The EU's trade surplus in forest-based industry products grew over the period peaking at EUR 8.5 billion in 2006, as shown in Graph 7. The extra-EU surplus of EUR 6.8 billion in 2007 was in large part due to a EUR 8.3 billion surplus in trade in pulp and paper products (itself explained by a EUR 9.3 billion surplus in paper and paperboard but a EUR 3.6 billion deficit in pulp), which outweighed a EUR 2.1 billion deficit in wood and wood products.
Manufacture of Furniture
The manufacture of furniture (NACE DN36.1) is largely based on wood products. In 2006, in the EU, according to PRODCOM data, 63 % of furniture sales contained wood or wood products. The EU furniture sector displays an industrial profile resembling that of wood and wood products, or printing (see: Graph 1). It has a higher share of the number of enterprises in total manufacturing than of employment, thus indicating mainly small enterprises, but a lower share of value added, thus indicating lower apparent labour productivity than, for example, in the case of pulp and paper.
When looking at the subsector’s main indicators, close to 150,000 enterprises were active in furniture manufacture in the EU in 2005. Employing 1.4 million, their total turnover was EUR 120 billion and they generated EUR 36 billion value added. Average personnel costs in furniture manufacture were EUR 21,900, below the average costs in manufacturing of EUR 33,900. Personnel costs were highest in Germany and lowest in Bulgaria.
In 2005, furniture manufacturing displayed lower profitability indicators than total manufacturing. The EU sector’s apparent labour productivity was EUR 26 800, ranging from EUR 55,400 in Denmark to EUR 2,900 in Bulgaria. In the EU, the average wage-adjusted labour productivity was 122 %, and ranged from 178.6 % in Latvia to 81.4 % in Greece. In the EU, the average gross operating rate was 8.0 %, while in furniture manufacture it ranged between 15.1 % in Latvia and 4.2 % in France.
The shares in total manufacturing of value added and employment in furniture manufacture are presented in Graph 9. In the EU, these ratios were 2.2 % and 4.0 % respectively. The highest shares of value added were displayed by the three Baltic states of Estonia (6.0 %), Lithuania (5.4 %) and Latvia (4.8 %), together with Denmark (4.1 %). Furniture also made the largest contribution to employment in manufacturing in Lithuania (8.7 %), Estonia (8.2 %) and Latvia (6.7 %), together with Poland (6.5 %).
In 2005, in the EU, employment size-class statistics are available for enterprises, and 16 Member States account for 81.6 % of people employed in furniture manufacture. In the furniture sector, the labour-force distribution was even and similar to that of the forest-based industries as a whole, according to the enterprise size classes:
- micro (22.2 %)
- small (24.8 %)
- medium (26.2 %)
- large (26.7 %)
In 2007, according to STS data EU furniture production was slightly below its 2000 levels. It appeared to have met rising competition on international markets. In 2007, the EU's total exports of furniture products amounted to EUR 45.1 billion, of which 26 % were made extra-EU. Total imports were worth EUR 41.4 billion, of which 31 % came from extra-EU. From 2000 until 2007, extra-EU exports of furniture grew at an average annual rate of 3 % while imports grew at 11 %. Thus, the extra-EU trade in furniture went from a surplus of EUR 3.3 billion in 2000 to a EUR 1.2 billion deficit in 2007.
The main partner countries for exports in 2007 were:
- USA (20 % of total extra-EU)
- Switzerland (16 %)
- Russia (12 %)
- Norway (10 %)
The main partners for imports were:
- China (47 %)
- Indonesia (6 %)
- Vietnam (5 %)
- Turkey (5 %)
The main contributors to EU exports were:
- Italy (31 %)
- Germany (18 %)
- France (7 %)
- Sweden (7 %)
The main importing Member States were:
- United Kingdom (26 %)
- Germany (17 %)
- France (10 %)
- Spain (7 %)
Data sources and availability
The source of all figures presented is Eurostat (unless specifically stated otherwise). Most data sources are continually updated and revised where necessary. This publication reflects the state of data availability in Eurostat’s reference database as of February 2008.
Structural Business Statistics (SBS) is the main data source for this publication. Two main SBS data sets have been used: annual enterprise statistics and annual enterprise statistics broken down by size classes. These and other SBS data sets are available under the theme ‘Industry, trade and services’ on the Eurostat website: http://epp.eurostat.ec.europa.eu/ (select ‘Data’ / ‘Industry, trade and services’ / ‘Horizontal view’ / ‘Structural Business Statistics’). Selected publications, data and background information are available in the section dedicated to European business, located directly under the theme ‘Industry, trade and services’ on the Eurostat website (direct link: http://ec.europa.eu/eurostat/europeanbusiness).
PRODCOM provides detailed information on the production of about 4 500 manufactured products (according to the Statistical Classification of Products by Activity: CPA). Data employed here relate to the value of production sold during the reference period.
COMEXT Eurostat’s database on external trade supplied data on the value of exports and imports of products, by type of product (CPA), by reporting Member State, by source and by destination.
Short-Term Statistics (STS) were used to complement SBS data with information on time-series trends based on the Industrial production index, which shows the evolution of value added at factor cost at constant prices.
This publication covers the 27 Member States of the European Union (EU) and one EFTA country with data available: Norway (NO).
EU aggregates include estimates for missing components where necessary. EU aggregates from the SBS data set were supplemented by rounded estimates based on non-confidential data where necessary and appropriate. Some differences may exist between aggregates and sub-components due to rounding. In some cases, when no EU totals are available, averages of available countries are presented.
All data are presented in ECU/EUR terms, with national currencies converted using average exchange rates prevailing for the year in question.
Symbols
“:c” confidential.
Sectors
Statistics are presented by sectors of activity according to the NACE Rev. 1.1 system of classification. Comparisons are made with Section D: Manufacturing.
Observation unit
The observation unit is the enterprise. An enterprise carries out one or more activities at one or more locations. Enterprises are classified into sectors (by NACE) according to their main activity. The enterprise should not be confused with the local unit, which is an enterprise or a part thereof situated in one geographically identified place.
Structural business variables
Variables are defined according to Commission Regulation No 2700/98 and include:
Number of enterprises
The number of enterprises active during at least part of the reference period.
Number of people employed
The total number of people who work in the observation unit, as well as people who work outside of the unit but who belong to it and are paid by it. This includes working proprietors, unpaid family workers, part-time workers and seasonal workers, etc.
Value added at factor cost
The gross income from operating activities after adjusting for operating subsidies and indirect taxes (including value added tax).
Turnover
The totals invoiced by the observation unit during the reference period, and this corresponds to market sales of goods or services supplied to third parties.
Apparent labour productivity
This is a simple indicator of productivity calculated as value added divided by people employed.
Average personnel costs
Personnel costs are the total remuneration, in cash or in kind, payable by an employer to an employee for work carried out. This is divided by the number of employees (paid workers), which includes part-time workers, seasonal workers, etc., but excludes those on long-term leave.
Wage adjusted labour productivity (%)
Value added divided by personnel costs, after the latter has been divided by the share of employees (paid workers) in the total number of people employed. It is also obtained by dividing apparent labour productivity by average personnel costs.
The gross operating rate (%)
This is an indicator of profitability where the gross operating surplus is related to the turnover generated. The gross operating surplus is the surplus generated by operating activities after the labour factor input has been recompensed. It can be calculated from the value added at factor cost less the personnel costs.
Context
Further Eurostat information
Publications
- Forest-based industries in the EU - Statistics in focus 74/2008
- Forestry Statistics - 2007
- Roundwood production 2005 - Data in focus 7/2007 (also available in French and German)
Main tables
- Gross value added of the forestry industry, at basic prices
- Total roundwood production
- Total sawnwood production
- Total paper and paperboard production
- Forest increment and fellings
- Forest trees damaged by defoliation
Database
- Forestry, see:
- Forestry Statistics