The global timber industry experienced uneven performance in January 2026, according to the latest Global Timber Index (GTI) report, which tracks the sector’s performance across various countries in Africa, Asia, and Latin America. While Indonesia and Thailand saw growth, other nations, including China, Brazil, and Malaysia, faced declines due to challenges such as rising costs and raw material shortages.
Mixed Growth Patterns Across the Timber Sector
The GTI for Indonesia and Thailand recorded growth in January, with values rising to 55.1% and 54.2%, respectively. Both countries saw positive momentum in their timber sectors, as domestic markets and production volumes improved. This upward trend suggests a recovery in Southeast Asia’s timber industry, driven by increased production and growing domestic demand.
However, in other parts of the world, the situation was less optimistic. Countries such as Gabon, Brazil, Republic of the Congo, China, Ghana, Mexico, Malaysia, and Ecuador all saw GTI readings below the 50% threshold, indicating a slowdown or contraction in their timber sectors. For example, China saw a decline in its GTI to 45.0%, while Ecuador dropped to 36.3%, reflecting persistent difficulties in the market.
Regional Developments and Key Industry Insights
Despite the overall contraction in some countries, certain regions showed encouraging signs. In Southeast Asia, Indonesia and Thailand stood out, with both countries reporting improved domestic markets and higher production volumes. These developments contributed to the positive readings for these nations and indicated a resurgence in local demand.
In Africa, particularly in Gabon and the Republic of the Congo, harvesting and production activities remained stable, contributing to a more balanced supply side. Although the industry faced challenges, the stability in these countries’ timber supply side was seen as a positive development amidst the global slowdown.
Latin America also had notable highlights, particularly in export performance. Brazil and Mexico saw increases in their export volumes, which contributed positively to their GTI scores. Brazil’s exports of lumber rebounded after three consecutive years of decline, reaching 2.96 million cubic metres in 2025. Meanwhile, Mexico also experienced growth in its timber exports, while Ecuador’s export market stabilised after earlier declines, showing signs of recovery.
Challenges Confronting the Timber Sector
One of the major challenges identified in the GTI report was raw material shortages and high production costs. Enterprises in Indonesia, Thailand, Brazil, and Ecuador reported issues with unstable or insufficient raw material supplies. Similarly, businesses in Malaysia, Ghana, and China noted that raw material purchase prices had remained persistently high, further stressing the timber sector.
In addition to the material shortages, timber businesses in several countries faced rising costs related to labour, electricity, fuel, and taxation. This had a direct impact on the overall cost structure of timber production, making it increasingly difficult for companies to remain competitive. To address these challenges, many enterprises called for stronger cost controls and government support through subsidies and tax incentives.
Export Growth Amid External Pressures
Looking at the broader industry, some countries managed to achieve export growth despite difficult external conditions. Thailand, for example, saw a significant 24% year-on-year increase in its furniture and parts exports in 2025, amounting to USD 1.80 billion. Brazil’s lumber exports also showed positive growth, bouncing back with a 5% increase after three years of decline.
Although Brazil’s shipments to the United States fell by 12%, the country saw increased exports to other markets such as China, Spain, the United Arab Emirates, and Saudi Arabia. This shift in export markets helped Brazil weather some of the challenges posed by fluctuating demand from its primary trading partners.
Industry Solutions and Future Outlook
In response to the sector’s challenges, several countries have implemented new policies and measures aimed at stimulating both supply and demand. In Gabon, for example, the Union of Foresters and Wood Industries of Gabon (UFIGA) and SETRAG, the railway operating company, reached an agreement on 7 January to remove the requirement for cash payments before transportation. This move is expected to ease cash flow pressures on forestry operators, improving the overall efficiency of the supply chain.
On the demand side, countries like Brazil, Mexico, and Ecuador have introduced new housing policies and targets that are expected to provide a boost to timber and furniture demand. These initiatives are seen as critical in driving growth within the timber sector and ensuring long-term sustainability.
The global timber industry has experienced a mixed performance in January 2026, with growth seen in Indonesia and Thailand, but contraction in many other regions. The sector faces significant challenges, including raw material shortages and high production costs. However, despite these hurdles, some countries have managed to maintain or even increase exports, and new government policies offer hope for future growth. The timber industry must adapt to ongoing challenges, and the progress made in several regions could signal a more balanced recovery in the coming months.
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