world news - 19.07.2007
Brazil: Civil construction fuels hefty growth in domestic market
The solidwood industry has been facing a severe crisis
over the past two years as a result of the weak US dollar
and the declining growth in housing starts in the United
States. Higher prices for solidwood products and the
growth of the civil construction sector would alleviate the
difficulties faced over the past few years.
According to the Brazilian Association for Mechanically
Processed Timber (ABIMCI), sectoral investments will
remain below the USD5 billion anticipated during 2005-
2014. Many companies have postponed their expansion
projects due to unfavorable exchange rates, which would
result in low margins and profits. Despite the fall of up to
30% in exported volumes of wood products in 2007,
revenues from exports would likely remain close to those
obtained in 2006 due to an increase in international prices.
The price hike reaches 30% in some segments, pulled
mainly by the growing demand for civil construction in
Europe.
Europe has replaced the United States as the top importer of
Brazilian wood products. Official estimates of new housing
starts in the US were projected to be 1.8 million in 2007 but
have been revised downward to 1.5 million units. In addition to the downturn in the US market, the US also
imposed import taxes on certain wood products after Brazil
exceeded the allowed quota established in the U.S. General
System of Preferences (GSP). As result, the import tax for
plywood has risen from 0 to 8%. Many companies are
redirecting their sales to European markets and the Brazilian
domestic market. ABIMCI foresees an increased between
25% to 30% in sales within the domestic market due to
growth in civil construction and the implementation of the
Brazilian Growth Acceleration Program (PAC).
See also:
- — New unit to test timber
- — Hawaii timber industry ready to saw
- — Swedish forest industry invests in broadband
- — North America faces sliding demand for lumber
- — Finnish forest industry needs more domestic timber
