Innovation and Automation: A Pragmatic Outlook for the Wood Industry

As LIGNA celebrates its 50th anniversary this year, it will do so under the banner of “Linking people, driving innovation.” With more than 1,200 exhibitors across 112,000 square metres of occupied space, the event will highlight the three major focus areas: connectivity, sustainable production, and engineered wood.

Despite economic uncertainty and global challenges, the wood products sector is positioning itself for a resurgence.

At the LIGNA Preview 2025 press conference in Hanover, Germany, on February 20,

Markus Hüllmann, Chair of the VDMA Woodworking Machinery Association and CEO of G. Kraft Maschinenbau GmbH, outlined a pragmatic yet optimistic vision for the industry’s future.

While acknowledging market turbulence, declining orders, and geopolitical tensions, Hüllmann emphasized the critical role of automation, digitalization, and sustainability in maintaining a competitive edge.

Hüllmann delivered a clear-eyed yet opportunity-driven perspective on the state of the wood products industry.

Addressing an audience comprising global media and exhibitors keen on understanding market trends, Hüllmann explained that the German woodworking machinery sector saw an all-time production high in 2023, but 2024 brought declines.

Industry-wide, production fell by 15% in 2024, while exports dropped by 11.5% from January to November, particularly in European markets.

However, North America stood out as the only region with positive trends.

“By and large, USA is the biggest and most important market for Germany,” Hüllmann noted. “We’re hopeful that we’ll come to terms with the Americans.”

Canada also remains a key market, ranking sixth in German woodworking machinery exports behind China, France, Austria, and Poland.

The industry expects stability in 2025, with an increase in incoming orders anticipated from the 3Q 2025 onward. Regional growth impulses are expected to come from overseas markets, particularly the U.S.

Hüllmann highlighted the pressing factors contributing to a “world full of uncertainty,” including economic slowdowns, geopolitical tensions, and climate change.

He pointed to weak markets, declining demand, and slower growth in major economies, all of which have made investment decisions more complex.

Climate change remains a double-edged sword for the industry, creating challenges such as extreme weather events and regulatory risks while simultaneously positioning wood as an increasingly preferred sustainable material.

Automation and Innovation: The Industry’s Edge

With skilled labour shortages worsening across many regions, automation and digitalization have become essential.

“It enables manufacturers in the wood industry to reduce costs, improve efficiency, and ensure consistent product quality, even though it is becoming increasingly difficult to recruit qualified personnel,” Hüllmann said.

He outlined strategies for sustainable growth, which include forming sales and tech partnerships, expanding into new markets, integrating automation innovators and startups, and attracting young, tech-savvy talent.

Product diversification beyond traditional woodworking applications is also on the rise. LIGNA 2025 will showcase advancements in these areas, reinforcing its role as the leading trade fair for woodworking machinery.

“LIGNA will be the ultimate showcase for technical solutions that the wood and furniture industry needs to be successful in a complex and highly competitive market,” Hüllmann stated.

Wood-Based Construction: A Growing Market

The increasing use of wood in construction is another major factor driving industry optimism. “I cannot envision a more sustainable market than the one we have,” Hüllmann said, citing wood’s positive image and growing public acceptance.

In Germany, 22% of all residential and non-residential buildings are now made of wood, with detached and semi-detached houses reaching a 28% share.

This trend is not confined to Europe; significant wood-based construction projects are underway worldwide. However, bureaucratic hurdles remain a challenge.

“Policymakers must establish competitive framework conditions and, most importantly, reduce bureaucratic obstacles for wooden housing and construction,” Hüllmann urged.

Beyond construction, wood product manufacturers face mounting pressures to enhance production efficiency and sustainability.

Labour and skills shortages have intensified demand for automated solutions, while cost and material efficiency concerns drive the adoption of smarter production technologies.

At the same time, manufacturers must cater to shifting product trends, including the use of recycled and alternative raw materials, intelligent solutions for timber construction, and innovative materials like wood foam and 3D-printed wood. The machinery industry stands ready as a “solution provider,” delivering cutting-edge tools to help customers navigate these challenges.

The industry’s confidence in LIGNA as a driver of innovation and investment remains steadfast, according to Stephanie Wagner, Head of LIGNA at Deutsche Messe AG.

Wagner emphasized that the event is more than just a trade fair – it’s a turning point for the industry. The woodworking machinery sector is adapting to an evolving global

landscape, leveraging its strengths in automation and technical excellence to secure a sustainable future. While economic and geopolitical uncertainties persist, industry leaders are taking proactive steps to ensure growth, with North America playing an increasingly pivotal role.

As Hüllmann put it, “There are many reasons for optimism.”

As part-time Managing Editor of Madison’s Lumber Reporter, Jennifer brings deep forest industry knowledge and editorial expertise.

Jennifer will play a key role in delivering the in-depth market insights Madison’s readers rely on.