German timber trade achieves turnover increase of almost 3% in 2007

Following the conclusion of the 2007 company comparisons, the German Timber Trade Association (Gesamtverband Deutscher Holzhandel - GD Holz) announced the turnover trend for the timber trade, in this connection against the background of declining growth in turnover during the year, a sales increase of 5.8% is indicated for the timber wholesale trade while the timber retail trade has to contend with a decline of around 9% over the whole year.
Overall, according to the GD Holz company comparison, the sector achieved a turnover increase of 2.75% in 2007, as reported by GD Holz in the run-up to the Hardware Fair.
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A characteristic feature of the sales trend in 2006 and 2007 is the clear influence of the price trend. Whereas prices over the last decade were stable in many ranges, from mid-2006 and 2007 there were repeated, considerable price changes, so that although the turnover trend reflects demand, it has however been increasingly influenced by the price trend.
Following the very good business year 2006 with the corresponding base target, the yardstick for further sales increases in 2007 had been set high, that especially applies to the 2nd half of 2007. The level of expectation in the sector was high, up to the end of 2006 the GD Holz economic barometer indicated very good levels for further development.
As expected, the timber retail trade got off to a quiet start in 2007 following the heavy demand levels at the end of 2006 - the reason for this was consumers bringing forward their purchases ahead of the increase in Value Added Tax as of January 2007. In this connection turnover in the floor coverings sector was in decline over the whole of 2007. The garden timber ranges in turn fared comparably well. As a result of the weather conditions, the range had a very early start, in March and April turnover was already well above the previous year's level. In May/June the market then slowed down. Nevertheless, this range increased its turnover on average by around 13% in 2007. However, all the other product ranges in the timber retail trade experienced a weaker trend. With the clear sales decline in 2007 it must be noted that in 2006 an increase of almost 7% was reached, so that the decline in 2007 involves a clear base effect. In addition the trend, particularly in the retail trade, was very varied on a regional basis, but some companies are reporting successful business.
The timber foreign trade tends to view the 2007 business year with more scepticism - already from April onwards sales in the key ranges were in decline, during the course of the year business settled down, but a major autumn revival failed to materialize. One exception is plywood imports, which performed at positive levels throughout the whole of 2007. This is also reflected in the turnover trend in the timber wholesale trade in the company comparisons.
In 2007 the timber wholesale trade achieved an overall turnover increase of 5.84%, a key contributor here was the timber-derived materials range, which achieved a clear double-figure increase of +14% throughout the whole year.
Cut timber remained stable at the previous year's level. In the second half of 2007 however, the high base level of 2006 as well as price pressure also made its presence felt in many ranges in the timber wholesale trade, which meant that sales declines were registered in the key areas, a particularly clear trend in December 2007. The growth in the timber wholesale trade in 2007 can be assessed very positively particularly in view of the high growth in 2006 and the associated high base target.
The German Timber Trade Association (GD Holz) assesses the 2008 business trend as very subdued. In particular, a difficult first half-year is expected. This is also indicated in the GD Holz economic barometer, which for the first three months of 2008 expects turnover to continue at predominantly constant or even declining levels. Impulses are in turn expected to be generated by the garden timber range as well as energetic building-shell restoration or interior design. Good opportunities are also predicted for board materials. Following the low level of building and planning permission approvals in 2007, a drastic decline in building completions must be expected in 2008. Impulses are expected for the timber retail trade, which after the weak year of 2007, is especially pinning its hopes on spring business in the garden timber ranges.