The latest Australian Bureau of Statistics (ABS) National Accounts data shows an increasingly divergent picture across the forestry, manufacturing and construction sectors. While construction continues to expand, forestry and the downstream manufacturing sector remain relatively stagnant, highlighting the changing dynamics of Australia’s building-material supply chain.
The September 2026 release, covering the June quarter of 2026, shows that Australia’s economy grew by 0.4 per cent over the quarter and 2.1 per cent over the year, which is relatively strong considering recent fiscal and monetary policy. Within the goods-producing sectors, however, performance varied significantly. Agriculture, Forestry and Fishing recorded only 0.2 per cent growth in the June quarter, compared with 0.4 per cent for construction. Manufacturing, by contrast, contracted by 1.9 per cent over the quarter.
The annual data tell a similar story. Agriculture, Forestry and Fishing increased by 3.7 per cent over the year to June 2026, while construction grew by 4.2 per cent. Manufacturing recorded much weaker growth of just 1.2 per cent.
The longer-term GVA figures reinforce the contrast. As shown in the accompanying charts, agriculture has continued to increase, reaching around $51.9 billion in FY2025–26. By comparison, forestry and fishing have remained flat from $9.4 billion in FY2024–25 to $9.3 billion in FY2025–26. Manufacturing excluding machinery and metal, which covers timber manufacturing, has also remained stable, with GVA falling slightly from $27.7 billion to $27.5 billion.
Figure 1: GVA in Agriculture, Forestry and Fishery
On the other hand, construction has moved in the opposite direction. GVA increased from $42.1 billion in FY2023–24 to $45.6 billion in FY2025–26. This suggests that persistent demand for construction activity is continuing to support the sector, even though the industries supplying some of its key materials are not experiencing equivalent growth.
Figure 2: GVA in Manufacturing and Construction
For the timber industry, this divergence is particularly important. Stronger construction activity does not necessarily translate into equivalent growth in domestic timber manufacturing. ABS data show that dwelling construction increased in the June quarter, supported by the existing pipeline of work (under-construction data), and new project commencements.
This reflects a more competitive building-materials market. The gap between growing construction activity and relatively stable domestic timber manufacturing may reflect a combination of factors, including increasing competition from alternative building materials, changes in construction methods, and growing on imported timber products.
The latest data also highlight an important structural dynamic: construction demand is increasing, but the benefits are not flowing evenly through the domestic timber supply chain. For forestry and timber manufacturers, the challenge is not simply whether construction activity is growing, but how much of that growth is being captured by Australian-produced timber and manufactured wood products.
This will be an important trend to monitor as housing construction, infrastructure investment and broader building activity evolve. The extent to which rising construction activity translates into additional demand for domestic timber products will depend not only on overall construction volumes, but also on changes in material substitution and market share across timber, steel, concrete and imported building products.
