Austria’s Sawmills and Timber Traders Seek Relief as Construction Demand Weakens

Weak construction market weighs on processors

Austria’s sawmill and timber-trading sectors are pressing policymakers for measures to protect the country’s wood-processing base as weak construction demand, high costs and expanding regulatory requirements constrain profitability.

Speaking around International Wood Day 2026, Austrian Sawmill Industry chairman Markus Schmölzer said companies were facing a combination of subdued demand, elevated costs and increasing regulatory density. The Austrian Federal Economic Chamber, or WKO, reported that the industry remains robust, but its earnings position is strained and the outlook is cautious.

The continued downturn in building construction is the central demand problem. According to Schmölzer, no genuine reversal is yet visible, while international crises are adding uncertainty, disrupting supply chains and raising costs. The industry is therefore asking the government to stimulate new construction and renovation without imposing additional expenses or requirements on investors.

Austria’s sawmill sector comprises more than 1,000 businesses, many of them family-owned, and employs around 10,000 people, mainly in rural areas. WKO said the sector generated production worth €3.1 billion in 2025.

Export momentum gives way to higher freight costs

Timber traders are experiencing a divided market. Franz Teuschler, chairman of the Austrian timber trade, said the roundwood business was developing positively, while demand for processed construction timber remained low.

Export performance had provided support in 2025. WKO cited Teuschler as saying that shipments recorded a very positive development, led by growth in Austria’s traditional European markets. He said demand subsequently fell following military escalation in the Persian Gulf, while freight costs rose sharply. The trade now expects lower revenue and margins in 2026.

In this environment, WKO said timber merchants increasingly depend on flexibility, broad product ranges and the ability to maintain deliveries. Austria’s timber trade has approximately 5,000 members and forms part of a broader building-materials, iron and timber-trade association representing more than 21,000 companies.

The wider Austrian wood industry includes more than 1,250 processing companies across sawmilling, furniture, panels, construction products, skis and pallet production. These businesses employ about 25,200 people, manufacture products valued at roughly €10 billion and generate a foreign-trade surplus of €1.95 billion, according to WKO. More than 444,000 people work across the country’s forestry and wood value chain.

Industry targets EU compliance burden

Regulation is another focus of the industry’s campaign. WKO said changes secured at the end of 2025 had reduced some of the most serious anticipated administrative burdens under the EU Deforestation Regulation, or EUDR. Nevertheless, additional evidence and documentation requirements remain for forest owners and companies throughout European wood supply chains.

Teuschler called for implementation that is simple, legally certain and practical. The industry argues that extra obligations are particularly difficult to justify in countries such as Austria, where it says there is no material deforestation risk and national rules already provide for sustainable forest management.

Schmölzer also criticized the broader flow of EU regulation. He pointed to the Packaging and Packaging Waste Regulation, saying companies were already required to apply it while more than 30 delegated legal acts were still outstanding at European level. In the industry’s view, postponing deadlines does not remove the underlying compliance cost.

Wood use linked to forest renewal

The sector is pairing its regulatory demands with a call for greater timber use and active forest management. WKO said carbon absorbed by growing trees can remain stored for years when timber is converted into buildings, structural components or furniture. Wood can also replace materials whose production creates higher carbon emissions.

The industry argues that harvesting trees sustainably for long-lived products creates room for new growth that absorbs additional carbon. It also considers forest renewal increasingly important as drought, heat, storms, pests and wildfires place older and less resilient stands under pressure.

Schmölzer said active forest management and stronger wood use would be necessary to support Austria’s objective of climate neutrality by 2040. For sawmills, the policy debate also has a direct industrial dimension: healthy, productive forests are the long-term raw-material base for processors, traders and downstream manufacturers.