Everything is green in the forest – News

The barometer differs in most respects from similar forecasts in other industries, where many companies are now starting to prepare for a worse economic downturn. The value of exports of forest products increased by more than nine percent in the first seven months of the year compared to the same period last year.

Forest owners are also the winners of growing e-commerce, as the demand for cardboard and packaging materials continues to grow. Prices for wood and pulp rose across the country in 2018.

Bubble Forest?

61% of forest owners believe that profitability is good or very good today, and what strikes in the barometer is that more people think that it will improve on three years. On the question of what they would do if they received a million crowns, 61% also replied that they would buy more forests.

When the sector is running fast for a long time, there is usually a risk of a bubble, but Ulf Möller, head of forestry and agriculture at Swedbank and Savings Banks, is not worried about that.

No, and that's because it's what we call the bank of foreign capital. Those who buy have other assets, such as other forest properties, or they are rich only in ordinary Swedish. Many buyers do not have a return obligation today, but they see it as a long-term investment.

Longer perspective

Ulf Möller however does not rule out that a recession will defeat profitability.

Prices for pulpwood and lumber may be lower, but you have to get out of the quarterly economy when talking about forest. For forest owners, it's not about a year but about eighty years old. Declining prices will reduce slaughter and allow the forest to grow.