The macro-economic climate was rather weak in Europe in 2005. On average, European economies grew by 1.6%, which is considerably lower than the 2.4% growth registered in 2004. The oil price hike and the uncertainty that followed had a subduing effect on European economic growth. In the new EU-Member States, the economic performance was considerably better.
Most of the MDF is used for building related applications. In 2005, the main MDF end-user market, the construction industry, evolved in line with the macro-economic situation. Overall construction output continued to grow after the excellent year 2004, albeit at slightly lower pace. While the growth of the total construction output accelerated with 2% in 2004, only a 1.3% growth rate was recorded for 2005. Residential construction continued to be the driving force behind the expansion of the building industry, thanks to historically low mortgage rates. For 2006, the new housing market is expected to lower somehow, in Western Europe, while renovation activity is projected to gain momentum. On the other hand, the performance of Eastern and Central Europe is forecast to improve further.