From January to September, both revenue and profits declined in wood processing and furniture manufacturing, as demand from the real estate sector remained under pressure.

2026-11-06 Source: Wood Home

Data released by the National Bureau of Statistics show that from January to September 2026, industrial enterprises above designated size nationwide recorded total profits of 6.03374 trillion yuan, up 15.5% year on year, with the overall recovery momentum of the industrial economy continuing to strengthen.

However, the wood-processing and downstream furniture manufacturing industries have been mired in a double decline in both revenue and profits, becoming a notably stressed sector amid an overall uptrend in industrial profits.

From January to September 2026, the wood processing and wood, bamboo, rattan, coir, and straw products industry reported operating revenue of RMB 462.7 billion, down 14.3% year on year; total profits amounted to just RMB 6.86 billion, a sharp decline of 41.6% compared with the same period last year. The downstream furniture manufacturing sector fared no better: operating revenue stood at RMB 385.88 billion, down 8.9% year on year; total profits totaled RMB 8.7 billion, halved from the previous year, with a decline of 51.3%.

Demand in wood processing and furniture manufacturing is highly sensitive to the real estate sector’s late-cycle dynamics and home‑improvement consumption, and adjustments on the real estate side are still ongoing.

Data released by the National Bureau of Statistics on October 19 show that from January to September, nationwide real estate development investment totaled RMB 5.3364 trillion, down 20.6% year on year; the sales area of newly built commercial properties was 564.83 million square meters, a decrease of 13.2% year on year, with residential sales area falling by 13.8%.

The simultaneous contraction in real estate investment and sales has directly suppressed Construction formwork The release of orders in downstream wood product categories, such as engineered wood panels and furniture.

The Wood Protection Industry Association of China reported that the Wood Products Manufacturing Purchasing Managers’ Index (WPMI) for October 2026 stood at 49%, down 0.6 percentage points from the previous month, indicating that industry conditions have once again declined within the contraction range and operational pressures have increased.

The WPMI was 0.3 percentage points lower than the manufacturing Purchasing Managers’ Index (PMI) of 49.3% for the same period, indicating that the wood industry’s overall performance lagged behind the manufacturing sector as a whole.

In October, the manufacturing BMI fell further to 49.3%, while the construction sector’s business activity index declined to 48.0%, down 2.3 percentage points from the previous month. The translation of expansionary policy measures into actual physical output continues to face a time lag, and the marginal slowdown in construction activity is placing additional downward pressure on timber demand.

(Issued by the China Wood Protection Industry Association)

Previously, the market had some expectations for the “Golden September and Silver October” period, but in reality, the peak-season effect has noticeably weakened. Starts on construction formwork and engineered wood products have seen only limited gains, while the furniture industry is sustaining only a portion of its underlying demand through existing‑stock renovations and export orders; processing plants are operating on razor‑thin margins. The sector is characterized by sharply rising costs amid sluggish demand recovery.

In the short term, accelerated progress on infrastructure projects in the fourth quarter, temporary support from export orders, and extremely low port inventories provide some floor support for lumber prices and industry conditions, limiting further sharp declines in the WPMI. However, until real estate investment and sales show clear signs of stabilization, profit recovery in the wood-processing sector is more likely to follow a “weak bottoming” pattern rather than a full-fledged trend reversal.

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Editor: Fang Fen