Wood Industry Case Study

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contains the business cycle. The real sales growth rate of the manufacturing sector moves in the same direction as the business cycle however the wood sector sales moves in the opposite direction between 2007 and 2008 as the business cycle which is at its peak.

1.3 Real sales of the wood sector as a percentage of the total manufacturing sales
Figure 3: Percentage share graph The percentage sector share of wood sales in the sales for manufacturing fluctuates throughout the years and this could be due to the cyclical effects in the economy. The share of the wood sector was relatively stable and at higher a rate in percentage terms between 2004 and 2005. The share in the wood sector decreased drastically during the financial crisis as
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The wood sector’s production growth correlates with the production growth rate of the manufacturing sector in certain areas of the graph which is evident that that factors that influence the manufacturing sector as a whole has a similar impact on the wood sector production grow. The wood sector’s real sales growth rate moved in the opposite direction of the real sales for the manufacturing sector when the economy experiences shocks. This highlighted the sensitivity of the wood sector’s sales growth rate to the shocks in the economy. The sensitivity is also evident with the wood sector‘s percentage share in the real sales of manufacturing sector. The percentage share decreases when the sector experienced a shock from the economy, particularly during the financial crisis that had an effect on the global market. Within the wood sector, there are subsectors that are greater than the other in terms of percentage share and the effect of the shocks has a different impact on the different components of the wood sector. The components within the wood sector are cyclical thus sensitive to cyclical effects in the economy. Thus evident that the economic activities in the country have an impact on the manufacturing sector and the wood sector however the wood sector is more vulnerable to the cyclical effects in the…show more content…
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