The Board of Directors of the European Federation of the Parquet Industry (FEP) met on 24 April 2013 and discussed amongst others both the parquet situation and recent economic indicators on the European market. The only parquet market still growing, compared to last year, is the Norwegian.

FEP: “Though it is yet too early to give a reliable forecast for the current year, the information provided by the individual country representatives indicates that the European parquet producers continue to face important challenges and variations at country level in a market that still does not show the signs of the recovery announced and expected by the European authorities.” FEP however wishes to stress the merits of its members in keeping their business well alive in these difficult times, “by finding ways to adapt to an ever changing environment and respond to the needs and expectations of the customers, with the most creative and innovative solutions.”

A brief per country recap, provided by FEP:

Austria
The harsh winter conditions in Austria had an impact on the parquet consumption, which went slightly down in the first quarter of 2013.

Belgium
2012 saw a stabilization on the parquet consumption side, whereas production is expected to increase by a comfortable margin. The first quarter of 2013 seems to be following the same direction.

Denmark
Parquet sales are flattening out. Construction output is expected to continue to grow in 2013 though at a low rate (2.2%), staying below pre-crisis levels. While all segments are forecast to increase moderately, new residential construction shall remain weak in 2013 reflecting subdued house price developments.

Finland
The consumption of parquet decreased significantly on a y/y basis to reach -10%. Unemployment is around 8.5%.

France
The first quarter of 2013 showed a decrease of 15% in parquet sales. Solid parquet is a little less affected and manages to perform better than multilayer. Production is adapting accordingly. Unemployment reached 10% and is still growing.

Germany
Parquet sales in Q1/2013 remained flat in general, with the exception of wide planks which continue to grow. The construction sector performs well with an increase in building permits.

Italy
The situation in Italy has been characterized by political uncertainties in the last few months, which translated into a difficult economic situation. However, things are expected to get better now that a government has been formed. The parquet market lost close to 20% in sales in Q1/2013, but should also follow the post political crisis stabilization path.

Netherlands
The negative trend witnessed at the end of 2012 is continuing. Consumption contracted by 10% compared to Q1/2012. The renovation market is more promising but this is evidently not the solution for parquet producers who need m2 sales. Production is growing, but the major part goes to exports (± 60-65%), predominantly the 2-layer products.

Norway
The parquet market is slowing down but still growing compared to last year. The building market remained flat. Unemployment is estimated to be between 2 and 3% at the moment.

Spain
Parquet production is estimated to be flat, but sales went down in the first quarter of 2012 by 5 to 10% compared to last year. The shift observed in other countries towards wide planks is also witnessed in Spain. Unemployment remains a major concern with 25% of the population out of job, and a worrying 50% among the younger generation.

Sweden
Parquet consumption is slightly down in Q1/2013, after a fairly flat Q1 in 2012. This tendency is actually valid for the entire economy, which is slowing down.

Switzerland
The mood in Switzerland remains sound. Parquet sales are more or less stable in Q1/2013. Wide planks are in vogue as well. The construction market is picking up after the winter, which is also reflected in the increasing number of building permits. One hopes that the economy can stabilize at last year’s level.

GFA/FEP, May 2013
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After a year in which the European parquet Industry succeeded in stabilizing and even slightly raising the overall consumption on the European market, FEP’s (European Federation of the Parquet Industry) preliminary forecasts for 2012 point in the direction of a decline of close to 4%.

FEP’s forecast should be seen as a first prognosis subject to variations. Furthermore, and in line with the general evolution in the past few years, FEP stresses that the results vary considerably from country to country and the overall picture is increasingly polarized rather than uniform at EU level. The latest figures suggest that parquet consumption in the EU/EFTA area in 2012 is slightly above 91 million m2, with the Austrian, German and Swiss markets performing solidly, whereas the situation in the southern regions remains disquieting, according to FEP. “Though the ongoing struggle confronting parquet producers in certain regions gives reason for concern, the German speaking countries are performing rather well and one can only wish that the positive trend will progressively also reach the important markets in the south of the EU,” FEP comments. As regards the product mix, the market shows a strong demand for one-strip planks, the considerable success of which largely compensates the decline in some other product categories.

Apart from the shaky economy, major challenges for the sector result from high energy costs, continuously stiff competition, expensive transport & logistics, extremely high unemployment rates in some important EU regions and the never certain EUR/USD ratio, according to FEP. “There are two major developments that fuel hope of a better future ahead,” comments FEP Chairman Lars Gunnar Andersen. “On the one hand the never ceasing innovative product creativity and evolutionary design reflected in the vision of the European parquet manufacturers. (...) On the other hand, the multiple economic forecasts for the current year converge on a more optimistic business development in the second semester, which should also give a boost to overall consumer confidence. Our industry is ready for the return of better times and market stability”.

GFA/FEP, February 2013
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In spite of the - especially Southern European - crisis, the volume of laminate floorings sold in 2012 by EPLF-members declined by a marginal percentage only. The 22 ordinary members of the EPLF sold 460 million m2 globally (previous year 468 million m2) out of their European manufacturing facilities. This means a decline of 1,7 % in volume.

According to the EPLF-board, stagnant sales of the association’s members in some countries seem to result from, as they put it, “economic downturn only”. And wherever laminate flooring becomes substituted, “the alternatives are often manufactured by EPLF-members too.”

The traditional ‘front runners’ of the Western European national markets didn’t change their rankings, whereas dimensions and absolute distances between them showed significant moves. With sales close to 298 million m2 (prev. 299 million m2) the market of the region as a whole showed a relative stability (- 0,6 %). Germany reduces to 76 million m2 (prev. 80 million m2), but still stays no. 1 as the strongest single market of the region in Western Europe. This development is seen by the specialists from the EPLF as less influenced by the economy rather than by new kinds of flooring systems winning ground.

Turkey (included by the EPLF as part of the Western European region) is gaining 66 million m2 (prev. 54 million m2), making it for rank 2. The ongoing economic growth of the country – resulting from a strongly growing population as well as urbanization tendencies with an accompanying construction boom – as well as the development of the Turkish membership offer a firm basis for this situation in the future, predicts the EPLF. In France laminate flooring lost 0.5 million m2, nevertheless the market volume was able to surpass the 40 million m2 (prev. close to 41 million m2) – a stable third rank. After years of massive declining Great Britain shows consolidation: 29 million m2 (prev. 30 million m2) and a ‘secure’ rank 4 inside Western Europe.

In the past the Netherlands, according to the EPLF, proved to be a “hoard of stability”. A decline of little more than 2 million m2 to 19 million m2 (prev. 21 million m2) doesn’t endanger rank 5, but through the eyes of the EPLF-board this means first signs of a shift of the demand to other products with a similar build-up, similar to Germany. Appreciable two-digit million amounts are generated in Spain still, 15 million m2 after 18 million m2, meaning rank 6. The economic crisis mainly in Southern Europe leaves its traces similar to other Western European markets: the remaining 18 countries of this most important sales region for the EPLF reach 53 million m2 after 55 million m2 in the year before – after all a minus of close to 4 %.

In Eastern Europe the contraction of the market has not ended yet too: 99 million m2 after (prev.) 104 million m2 have manifold reasons (- 4,8%). Poland defends rank 1 with 24 million m2 (prev. 26 million m2), closely followed by Russia 23.7 million m2 (prev. 25 million m2). Concerning Russia, the EPLF expresses its opinion that the Russian figures well represent the truth about its members’ operations, but not the market as a whole, which is judged to be more positive – the reason being successfully commissioned new capacities in the country. Romania is reviving slowly to 9.8 million m2 (prev. 9.2 million m2), maintaining third place ahead of Ukraine with 8 million m2 (prev. 8 million m2). Hungary - 4.3 million m2 (prev. 5.5 million m2) – loses its fifth rank to Bulgaria - 4.8 million m2 (prev. 4.4 million m2). The other 13 countries of this second part of the EPLF’s home market gather 24 million m2 after 26 million m2 in the previous year – altogether a minus of 7.7 %.

The speed of the decline in Northern America dropped significantly. But 24 million m2 after 27 million m2 in the previous year merely means the proverbial ‘fade of the pain‘, nothing more, explains the ELPF. In 2010 the sales in this area of EPLF’s overseas trade amounted to 41 million m2. From the sales in 2012, 12 million m2 were directed to the USA (prev. 13 million m2), parallel the development in Canada – also 12 million m2 after 13 million m2 in the previous year.

Asia-Pacific succeeded light tendencies of growth on a comparably low level. Years ago the market for imported floorings from EPLF-members in China crashed, due to the installation of own capacities inside the country. Now the EPLF can state a kind of ‘roll back’-tendencies especially in the segment of high-prized, specialized brand products. China including Hong Kong is back surpassing 3 million m2 (prev. 2.3 million m2), Israel achieves 1.9 million m2 (prev. 2 million m2), followed by Iran 1.6 million m2 (prev. 1.6 million m2) and Australia 1.5 million m2 (prev. 1.4 mil. m2). Worth mentioning in other regions are especially Chile with 6.5 million m2, Mexico 4.3 million m2, Columbia 2.1 million m2, South Africa 1.9 million m2 and Argentina 1.6 million m2.

Sales by Continents (source: EPLF)

GFA/EPLF, January 2013
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