Wood and paper production statistics - NACE Rev. 1.1
From Statistics Explained
- Data from January 2009. Most recent data: Further Eurostat information, Main tables and Database.
This article introduces a set of statistical articles which analyse the structure, development and characteristics of the economic activities in the wood and paper manufacturing sector in the European Union (EU). This sector covers NACE Rev 1.1 Divisions 20 and 21, and its activities are treated in more depth in two further articles:
- the manufacture of wood and wood products, corresponding to NACE Division 20, which includes all stages of wood processing that follow on from the activity of forestry;
- the manufacture of pulp, paper and paper products, corresponding to NACE Division 21, which covers downstream activities that use output from the initial processing of wood.
It is important to underline that the wood and paper manufacturing sector does not include forestry, logging and related activities (NACE Division 02), and so these are not covered in this article.
Main statistical findings
The manufacture of wood and paper (NACE Divisions 20 and 21) was the main activity of 216.2 thousand enterprises across the EU-27 in 2006. These enterprises employed 2.0 million people in 2006, the equivalent of 1.5 % of the total non-financial business economy (NACE Sections C to I and K) workforce. They generated EUR 78.3 billion of value added, equivalent to a 1.4 % contribution to the added value of the non-financial business economy.
The manufacture of wood and wood products was much larger than the manufacture of pulp, paper and paper and paper products, in terms of both enterprise numbers (91.0 % of all enterprises manufacturing wood and paper) and employment (64.0 % of the sectoral workforce). However, it was a little smaller in terms of the value added that it generated (EUR 37.2 billion) in 2006, compared with EUR 41.1 billion for the manufacture of pulp, paper and paper products.
Wood and paper manufacturing enterprises in Italy accounted for a little over one fifth (21.2 %) of all enterprises across the EU-27, far more than in any other Member State, including Germany (6.9 %). However, it was the wood and paper manufacturing enterprises in Germany that generated by far the most value added (20.9 % of the EU-27 total in 2006), far ahead of Italy (12.2 %) and then France (10.0 %). None of these Member States were particularly specialised in wood and paper manufacturing activities, as the relative contributions of this sector to non-financial business economy value added was close to or below the EU-27 average in each of the three main producing countries. In these relative terms, Finland was by far the most specialised Member State, as the relative contribution of wood and paper manufacturing to the non-financial business economy value added was about four and a half times the EU-27 average. Estonia, Latvia and Sweden were also relatively specialised in these activities in 2006.
In terms of the contribution of the wood and paper manufacturing sector to employment within the non-financial business economy, the region of Detmold (Germany) was the most specialised in this activity; 9.1 % of its non-financial business economy workforce were employed in wood and paper manufacturing activities in 2006. The next most specialised regions were found in Finland and Sweden, with high degrees of specialisation also recorded in the Baltic Member States (each considered as one region at the level of detail shown in the map), as well as parts of Romania, the Czech Republic, Italy, Austria and Slovenia.
The evolution of EU-27 production indices for wood and wood products manufacturing on the one hand, and pulp, paper and paper products manufacturing on the other, were relatively similar in the ten years through until 2007. For both of these activities, output growth was relatively strong in the period between 1997 and 2000 (particularly in the case of wood and wood products), before a decline in production was observed in 2001. This was then followed by a relatively steady upswing (albeit with a temporary fall in the output of pulp, paper and paper products in 2005). The growth in output over the ten year period through until 2007 averaged 1.8 % per year for pulp, paper and paper products and 2.4 % per year for wood and wood products, both of these rates were relatively similar to the average recorded for the whole of the industrial economy (2.1 % per year).
There were distinct differences in enterprise size structure between the two subsectors. The pulp, paper and paper products subsector in the EU-27 was dominated by medium-sized (those employing between 50 and 249 people) and large enterprises (those employing more than 250 people); these two size classes accounted for a combined share of 78.8 % of this subsector’s workforce. In contrast, micro (those employing less than 10 persons) and small enterprises (those employing 10 to 49 persons) together accounted for the majority (61.0 %) of employment within the wood and wood products subsector.
These relative differences in the size class structure between the two subsectors may, at least in part, explain some of the differences observed in productivity levels between the two activities. EU-27 apparent labour productivity was highest among large enterprises within the pulp, paper and paper products subsector (EUR 73.3 thousand per person employed) in 2006. At the other end of the range, each person employed in a micro enterprise in the wood and wood products subsector generated an average of EUR 20.0 thousand of added value.
The workforce of the EU-27’s wood and paper manufacturing sector displayed a particularly high propensity to employ men; in 2007, almost four fifths (79.0 %) of the workforce were men, compared with a little less than two thirds (64.9 %) across the non-financial business economy as a whole. This characteristic was common across all of the Member States for which data are available .
The overwhelming majority (94.6 %) of the wood and paper manufacturing workforce were engaged full-time across the EU-27 in 2007, a notably higher proportion than the non-financial business economy average (85.7 %). These working-time characteristics were common to all of the Member States with the exception of Hungary, where the proportion of part-time work (6.8 %) in wood and paper manufacturing was almost three percentage points higher than the non-financial business economy average (3.9 %).
The age profile of the EU-27’s wood and paper manufacturing workforce was broadly similar to that of the non-financial business economy in 2007, albeit with a slightly lower proportion of persons under 30 years of age (22.0 % compared with 24.3 %). Among the Member States, however, the proportion of young workers in the wood and paper manufacturing sector was significantly lower than national non-financial business economy averages in Denmark (15.6 % compared with 27.1 %) and the Netherlands (19.2 % compared with 30.3 %), and to a lesser degree in France, the United Kingdom, Sweden and Cyprus.
Expenditure, productivity and profitability
The structure of operating costs in the EU-27’s wood and paper manufacturing sector was similar to that observed for the whole of the non-financial business economy in 2006; the bulk (82.1 %) of operating expenditure was accounted for by purchases of goods and services.
Investment across the EU-27 in the wood and paper manufacturing sector accounted for 1.4 % of the non-financial business economy total in 2006, which was the same proportion as the relative share of wood and paper manufacturing in total value added. The relative importance of investment within wood and paper manufacturing activities was highest in Finland (6.3 % of total investment), Estonia (4.2 %) and Latvia (4.1 %), three of the Member States that were most specialised in the manufacture of wood and paper.
Investment in tangible goods covered 18.6 % of the value added that the wood and paper manufacturing sector generated in the EU-27 in 2006, a very similar proportion (18.4 %) to that noted across the whole of the non-financial business economy. Among the Member States, the investment rate for wood and paper manufacturing was particularly high in Latvia (66.3 %) and Lithuania (53.5 %); these rates were also relatively high in relation to national investment rates for the non-financial business economy (47.1 % and 39.9 %).
The apparent labour productivity of the wood and paper manufacturing sector across the EU-27 was EUR 39.4 thousand per person employed in 2007, about 10 % less than the non-financial business economy average. However, apparent labour productivity of the pulp, paper and paper products subsector was EUR 57.5 thousand per person employed, which was about double the level recorded for the wood and wood products manufacturing subsector (EUR 29.3 thousand per person employed). In all of the Member States for which information is available , with the notable exception of Ireland, the apparent labour productivity of the pulp, paper and paper products manufacturing subsector was higher (often considerably so) than productivity within the wood and wood products subsector.
Average personnel costs in the EU-27’s pulp, paper and paper products manufacturing subsector (EUR 37.7 thousand per employee) were also higher than those experienced across the wood and wood products manufacturing subsector (where each employee cost about 20 % less). As a result, the difference in productivity levels when measured in wage adjusted terms narrowed, with the ratio for the pulp, paper and paper products manufacturing sector (152.5 %), almost identical to the non-financial business economy average (151.1 %), while that for the wood and wood products manufacturing subsector was somewhat lower (140.1 %).
The gross operating rate (which is one measure of profitability) of the wood and paper manufacturing sector of the EU-27 was 9.8 % in 2006, a little below the corresponding rate for the non-financial business economy (10.8 %). Whilst this pattern was repeated across most of the Member States, the profitability of the wood and paper manufacturing sector was about half the non-financial business average in the United Kingdom (7.6 % compared with 14.4 %), while in Portugal it was about higher (13.3 % compared with 9.2 %). Whereas the profitability of the EU-27’s pulp, paper and paper products subsector had been higher than that of the wood and wood products subsector in 2002 (12.6 % and 9.5 % respectively), the difference between these two rates subsequently narrowed and reversed, with the gap widening in 2006 (9.1 % and 10.7 % respectively).
The EU’s internal market accounted for approximately three quarters (74.8 %) of the EU-27’s trade in wood and paper products (CPA Divisions 20 and 21) in 2007. Trade in wood and paper products with the rest of the world, however, recorded a surplus of EUR 6.2 billion in 2007, with exports valued at EUR 30.4 billion and imports valued at EUR 24.2 billion. More specifically, the overall surplus was derived from pulp, paper and paper products (a surplus of EUR 8.3 billion) as there was a deficit (EUR 2.1 billion) for wood and wood products. The trade surplus for pulp, paper and paper products grew considerably (58.4 % overall) in the period between 2002 and 2007, during which time the trade deficit for wood and wood products also widened (from EUR 0.4 billion in 2002).
Exports of wood and paper products represented a significant share of all industrial exports in just a handful of Member States; in Finland and Latvia they represented a fifth of industrial exports in 2007, while in Estonia and Sweden they accounted for a little more than 10 % of the total, significantly more than their average share (2.6 %) across the whole of the EU-27. Finland and Sweden had the highest trade surpluses for wood and paper products in 2007 (EUR 11.2 billion and EUR 10.8 billion respectively), with surpluses also recorded in Germany (EUR 5.5 billion) and Austria (EUR 4.2 billion). In contrast, the United Kingdom had by far the largest trade deficit for wood and paper products (EUR 9.5 billion).
Although the United States remained the largest export market for EU-27 wood and paper products (accounting for an 11.1 % share of extra-EU exports) in 2007, this share was down sharply on the corresponding value for 2006 (14.2 %); the relative importance of exports to Russia and Norway grew between 2006 and 2007. Imports of wood and paper products into the EU-27 from China continued to grow, overtaking the United States for the first time in 2007, with a 14.8 % share of all EU-27 wood and paper imports. Brazil and Canada were also relatively important providers of wood and paper products to EU-27 markets; they accounted for 11.7 % and 7.1 % respectively of extra-EU imports in 2007 (significantly higher than their shares for all industrial goods, 1.9 % and 1.5 % respectively).
Data sources and availability
The main part of the analysis in this article is derived from structural business statistics (SBS), including core, business statistics which are disseminated regularly, as well as information compiled on a multi-yearly basis, and the latest results from development projects.
Other data sources include short-term statistics (STS), the Labour force survey (LFS), the COMEXT database for external trade and PricewaterhouseCoopers’ 2008 Global Forest, Paper & Packaging Industry Survey.
The multi-functional role of forests is an area of increasing global scrutiny. Wood is an important, renewable economic resource, while forests are increasingly recognised for the environmental role they play in climate regulation, biodiversity, air, soil and water quality, as well as their recreational function.
Building on the EU Forest Action Plan (COM(2006) 302 final) for 2007 to 2011 and its 18 key actions for sustainable forest management and the improved long-term competitiveness of its associated industries, the EU has been active in pushing for international commitment to end global forest cover loss by 2030 as part of a new 'forestry package'. This package includes proposals from the European Commission that look to address some of the challenges of deforestation and forest degradation in order to tackle climate change and biodiversity loss (COM(2008) 645 final), as well as laying down obligations for operators who place timber and timber products on the market (COM(2008) 644 final). These would include obliging market traders to certify that the timber and timber products they sell have been harvested according to the relevant laws of the country of origin. It is also proposed that a new global financial fund, known as the Global Forest Carbon Mechanism (GFCM), be made available to developing countries as a reward for emissions reductions achieved by taking action to reduce deforestation and forest degradation. The EU’s Emissions Trading Scheme would be a major source of funding for any GFCM, whereby EUR 2.5 billion could be provided to the fund by 2020 through 5 % of auctioning revenues. Furthermore, those governments that sign-up to a global climate change deal could also be allowed to use so-called deforestation credits towards their individual CO2 reduction commitments.
These proposals, as well as an EU Forest Action Plan could have implications for the diverse wood and paper manufacturing sector in the EU. In part, this may reflect the varied size structure of enterprises within the two subsectors: the pulp, paper and paper products subsector is dominated by large, multinational enterprises, many of which are in the Nordic Member States; whereas, the wood and wood products subsector is characterised by relatively small-scale enterprises that are predominantly privately-owned and serve local or national markets.
Further Eurostat information
- European Business: Facts and figures - 2009 edition
- Communication COM(2006) 302 final on an EU Forest Action Plan
- Communication COM(2008) 645 final - Addressing the challenges of deforestation and forest degradation to tackle climate change and biodiversity loss
- Proposal for a Regulation COM(2008) 644 final laying down the obligations of operators who place timber and timber products on the market