The 2009 UPM Tilhill Timber Bulletin Trends and influences on the UK standing coniferous timber sales market shows that the highs of 2007 have quickly dropped away. Peter Whitfield, Tilhill timber operations director says: "However, the UK forest industry has proven robust and shown its ability to  weather these turbulent times."

The weak pound has resulted in imports being significantly reduced. This has benefited domestic producers, despite overall demand for sawn and board products remaining weak. UK producers have managed to substitute volumes lost as imports and the significant fall in oil prices has helped in holding overall operating costs. Although this is good news, we are now seeing a trend of rising oil prices and a weakening of the US dollar.

Timber prices have been hit, but not to the extent that may have been feared. The fall in prices over last winter has led to a significant decline in the volume of standing timber being brought forward from the private sector. Despite the downturn in sawn timber consumption, there is still good demand for standing timber and prices are already showing signs of recovery.

On a positive note, demand for energy wood continues to increase and new capacity in Scotland in 2009 alone equates to an additional annual demand of 850,000t of biomass. This fuel comes from sources including roundwood, forest residues and recycled wood.

“Looking ahead, doubts remain as to whether the economy has bottomed out," says Whitfield. "Undoubtedly, much of the positive impact on the timber industry in recent months has been exchange rate driven. Forecasters are suggesting a return to mid 2008 exchange rate levels on the euro but the UK forestry industry is well placed to adapt to changing circumstances."