Editor WoodBusinessPortal.com team - research, December 18, 2019
The 2020 outlook for the global paper and forest products industry remains negative, Moody`s Investors Service says in its recently released outlook report. Earnings declines will be seen primarily in the paper, paper packaging and market pulp sub sectors as excess supply causes prices to fall. Conversely, the outlook for wood products and timberland is positive with earnings expected to strengthen with rebounding wood product prices, the report states.
"We expect operating earnings for the global paper and forest products industry to decline by 2-4 per cent in 2020," Ed Sustar, a Moody`s senior-vice president, said in a news release. "Lower prices across most sub sectors will be the primary driver for lower earnings, as well as the on-going secular demand decline for paper, partially offset by lower costs for recycled fibre."
However, singling out the wood products and timberland sub sector, Moody`s says operating earnings will increase by about seven per cent in the coming year. North American wood product prices will rebound as capacity curtailments remove some slack from the market. U.S. housing starts likely will be flat, while U.S. South log prices likewise will stay flat on the back of excess inventory of standing timber.