It’s still too early to say for sure, but it’s variously estimated by European plywood importers and distributors that the Covid-19 pandemic will slice 10-20% off their 2020 profits.
Trade has since seen a bounce back, varying in degree from country to country, but companies don’t expect it to make up for the sales lost when the health crisis first hit.
Looking ahead, the sector is hopeful about continued market recovery, although there’s awariness about making more than short-term forecasts and concern about the economic fallout as European governments wind down pandemic business support measures.
There is some preoccupation too about the potential impacts on the European economy of Brexit if the UK does come to the end of its transition period to depart the EU on January 1 and leaves without a trade deal.
The better news, however, is that, while plywood companies across Europe acknowledge that they’ve taken a significant hit from the pandemic, the general view is that the contraction in trade has not in fact been as severe as expected earlier in the year.
“In normal circumstances, losing a tenth to a fifth of sales would be seen as a bit of a disaster,” said one importer. “But if you’d offered us that when we were at peak lockdown, we’d have grabbed it with both hands. At one point we were trading at between 30 and 35% of normal levels.”
This expressed the general consensus. Some companies closed for a period late March into April. Most kept trading, but report that they were mainly dealing with outstanding orders.
“There was new business coming into the pipeline, but it was significantly down and more hand to mouth,” said an importer/distributor. “Very few customers were committing more than a few weeks ahead. We actually kept all our staff on, but it was as much to keep communications channels open with customers, as to actually do business.” B
ut the worst of the crisis was, in the words of one company, ‘surprisingly short-lived’. Business was reported to have started recovering as early as May and picked up from there.
“An indicator that things didn’t turn out quite as bad as customers expected was that we got calls in April asking for longer payment terms, then in May they came back to us and said that they no longer needed them,” said an importer distributor.
Some businesses report that they were already back to preCovid trade levels by June and that momentum continued to build in July.
“Early on, part of the uptick in activity was due to delayed supply shipments coming in and completing outstanding orders that we’d been able to fulfill before,” said an importer. “But new orders also started to increase.”
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