The Mortgage Bankers Association (MBA) also believes that the Fed’s continued plan to cut interest rates in 2025 will create room for banks to reduce 30-year home loan interest rates in the United States. Although it will be difficult to return to 6%, the MBA predicts that 30-year home loan interest rates in the United States will cool down and fall to 6.4% (down 0.35% from the current level) by the end of 2025, helping to revive the housing market. In particular, the number of housing building permits in the United States, although not yet returning to the high level of 2022, showed signs of recovery in December 2024 when it increased slightly by 5.2% compared to November 2024.

Quoting the above comments, MBS believes that with the Fed’s interest rate cut plan and developments in the US housing market, global wood prices will be under pressure to adjust towards a positive recovery in the second half of 2025. The average selling price of wood products will also benefit and increase accordingly, boosting the revenue of wood and wood product exporting enterprises.

After the strong fluctuations of 2021 and 2022, world wood prices in the medium term tend to fluctuate relatively stably around the average price of 510 USD/1,000 board feet, helping businesses reduce risks from fluctuations in raw material prices. In addition, the fact that world wood prices tend to fluctuate more stably makes it easier for businesses to plan production and balance raw material costs depending on consumption demand in major markets.

GREAT OPPORTUNITY FOR VIETNAM’S WOOD EXPORT

Evaluating Vietnam’s wood export market, Mr. Huynh Thanh Van, Chairman of the Board of Directors of S Furniture Company – a large enterprise in the Vietnamese wood industry – said that the United States is the most important market for Vietnam’s wood industry.

Currently, this market is very stable, moreover, this country has just experienced a very large forest fire, many large projects were lost, leading to increased demand for wood and wood product imports. This will be a great opportunity for Vietnamese wood furniture manufacturers, as the demand for rebuilding houses and projects will be very large in the coming years.

“President Donald Trump’s increase in tariffs on imported goods from China has also caused a large number of orders to shift from China to Vietnam, because Vietnam’s infrastructure has also improved a lot compared to before.

The supporting industry serving the wood industry has also developed; skilled workers produce beautiful, high-quality products. These are the competitive advantages of Vietnamese enterprises compared to other countries in the region,” Mr. Van informed.

In order to meet the needs of US importers, Mr. Van said that Vietnamese enterprises must obtain certificates such as BSCI, SMETA, FSC, COC. These are certificates of regulations and standards when exporting goods to demanding markets. If these standards are not met, the opportunity to export goods to this very potential market will be lost.

“The main export markets bring prospects for the wood industry in 2025, in which the US market is the leader, but strong competitive pressure from other suppliers such as China, Malaysia, Indonesia also requires Vietnamese enterprises to focus on developing products with added value. Moreover, the risk of US anti-dumping investigations can put businesses at risk. Therefore, businesses need to promptly grasp the standards and regulations of the United States to avoid being investigated for anti-dumping and having their taxes increased,” said Mr. Ngo Sy Hoai, Vice President and General Secretary of the Vietnam Timber and Forest Products Association.

According to Mr. Van, good preparation by businesses will be one of the factors helping the wood industry achieve the target of 18 billion USD in exports in 2025. Currently, businesses in the industry are focusing heavily on digital transformation, applying digital in production and business, helping to reduce costs and product prices. The application of advanced and modern production technologies not only helps reduce labor costs, but also increases product quality.

In addition, businesses today are also very concerned about environmental issues, especially green environment and green transformation. Because green transformation is now a mandatory requirement from customers and the world market, if not transformed, businesses will face many risks.

Contrary to growth expectations in the EU market, the assessment of wood exports is quite pessimistic for the Chinese and EU markets. According to MBS’s report, in 2024, China – the world’s second largest economy – faced many difficulties. Weak domestic consumption demand and a sluggish real estate market will continue to hinder the country’s economic growth in 2025.

UNBREAKING FORECASTS IN CHINA AND EU MARKETS

MBS assesses that, with the Fed’s plan to cut interest rates in 2025, the People’s Bank of China (PBOC) will take similar measures to revive economic growth in the country and is expected to lower interest rates to 3.05% by the end of 2025. Although China is expected to introduce many solutions to stabilize and prevent a decline in the real estate market in 2025, MBS believes that the above measures will not show clear effectiveness in the short term.

For the EU market, which currently accounts for 3.3% of Vietnam’s wood and wood products export market share, MSB forecasts that the demand for wood and wood products in this region has not improved much compared to 2024, and will continue to face “headwinds” from declining labor productivity to geopolitical tensions in countries in the region.

The Organization for Economic Cooperation and Development (OECD) recently lowered its economic growth forecast for Germany and France, saying that the political crisis and weakening global demand have affected the growth prospects of the two leading European economies, with growth rates of 0.7% (down 0.4% compared to the previous forecast) and 0.9% (down 0.3% compared to the previous forecast), respectively. With this situation, wood and wood products exports to the Chinese and EU markets may decline in 2025…