30 March 2015, HD FestForest news - The majority of European paper and forest product companies will increase their capital expenditure (capex) over the course of 2015. This is according to a new report from Moody's, which said the investment will be used to drive businesses' expansion plans.

Matthias Volkmer, Moody's vice-president, senior analyst and author of the report, commented: "We expect the aggregate operating income of Moody's rated European paper and forest product companies to increase by one per cent to three per cent over the next 12 to 18 months."

"This reflects our expectation that increased operating earnings from rated packaging companies will outweigh those from paper producers, which continue to face secular declines, which is why our outlook for the sector is stable," he added.

Moody's said that of its nine rated European paper and forest product companies that have revealed their preliminary financial results for 2014, six underwent either single or double-digit growth.

The organisation claimed this may reflect the efforts undertaken by these firms to broaden or reposition their business profiles away from the mature European paper market through a variety of means, such as investment in related segments and cost cutting.

This report is good news for the forestry industry, as any increase in capex should see a rise in demand for the products they produce.

Last year was something of a mixed 12 months for the forestry industry as a whole, although there were a number of positive developments, such as Wood Resources Quarterly revealing global softwood log trade reaching an eight-year high.

Source: http://www.hdfestforest.com/News-archive.10028.aspx?recordid10028=801781803