Finland’s forest industry is showing increasingly divided trends, with modest recovery in the sawmill sector contrasting sharply with a worsening outlook for forest owners.
According to a new forecast from Pellervon taloustutkimus PTT, the value of Finland’s sawn timber exports is expected to rise by around four per cent in 2026. However, the broader outlook for the forest sector remains subdued.
Sawmill exports offer limited relief
Despite ongoing market weakness, some positive signals are emerging, particularly in the sawmill segment. After several years of declining demand—largely driven by a slowdown in Europe’s construction sector—exports are now showing signs of stabilisation.
Demand for timber products has improved in certain markets, supporting the projected increase in export value. For Finland, where the forest industry remains a cornerstone of exports, this suggests that the worst phase may have passed in parts of the sector.
However, the recovery remains fragile and starts from relatively low levels. Price pressure and weak construction activity across Europe continue to weigh on market conditions.
Forest owners face weaker returns
The situation is significantly more challenging for forest owners. The forecast points to declining revenues, driven in part by reduced demand for pulpwood and continued weakness in the pulp and paper industries.
– The short-term outlook for forest owners is bleak, PTT states in its analysis.
Several structural factors are behind this development. Global demand for paper and print products has been falling for years, while investments in new bio-based products have yet to fully offset these losses.
In addition, uncertainty surrounding energy prices and transport costs is affecting purchasing decisions, leading industry players to limit raw material procurement.
Industry restructuring continues
Finland’s forest sector has been undergoing a major transformation for years. Traditional paper production has declined sharply, while companies have shifted focus toward packaging materials, biofuels and other bio-based products.
Major companies such as UPM-Kymmene, Stora Enso and Metsä Group have invested heavily in new facilities and technologies. Despite this, profitability remains under pressure in several segments.
At the same time, there is a growing debate in Finland over the role of forests in climate policy. Stricter conservation requirements and reduced harvesting levels could constrain raw material supply, adding further pressure on forest owners’ income.
Competition from alternative materials and global suppliers is also intensifying, particularly in the packaging sector, where pricing pressure remains strong.
Source: Pellervon taloustutkimus PTT
Fact check
PTT estimates that the value of sawn timber exports will increase by around four percent in 2026. At the same time, forest owners are expected to face weaker profitability and continued market pressure.
