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Domestic softwood sales up 1.9% on prior year

Sales of domestically produced sawn softwood rose 1.9% for the year-ended March 2016, hitting a new record of 2.765 million m3, as reported sales for the month of March also punched out a new record, totaling 269,649 m3, up 1.0% from the prior month. 

The last two months continue strong sales figures for the sawn softwood sector, which is reveling in the long-running housing boom. Because month-on-month data has shown repeatedly higher sales than for the year prior, the sales trend has been modestly upwards in the last six months, after dipping in early 2015, during the period when imports were performing strongly. The chart below displays this recent experience.

fig7

To go straight to the dashboard and take a closer look at the data, click here.

As is often the case, despite the rising sales, not all grades have fared well. 

The major story is the continuing decline in the sales of untreated structural timber.

Structural sawn softwood <120mm, while still the largest single product, experienced a sales decline of 7.05% for the year-ended March 2016, with sales reportedly totaling 726,589 m3. For the larger dimension grade of Structural Sawn softwood >120mm, sales declined a sharper 19.1% to 67,261 m3. In total, the decline in untreated structural sawn softwood sales totaled 71,049 m3.

The industry is well aware that the treated substitute – H2F – is advancing on the market for the untreated products. Sales of H2F grew 16.36% over the same period, adding 86,462 m3 and ending the year at 615,053 m3. The residual from the significant substitution is just over 15,000 m3 and probably represents the extent to which the market grew over the year-ended March 2016.

The grade-by-grade sales data for the last two years is displayed in the following chart.

fig8

To go straight to the dashboard and take a closer look at the data, click here.

Other grades of note including Packaging, which experienced growth of 13.4%, with sales totaling 477,133 m3, the third largest volume of sales for the year.

While Fencing sales were down 6.91% for the year-ended March 2016, their sibling product, Outdoor Domestic, saw sales rise a strong 9.37% to reach 211,961 m3. Apparently the new pergola and deck are all the rage, but fences are proving less relevant. Similarly, Landscaping sales were flat (up 0.69%).

There is without doubt a ‘staging’ element to sales of sawn softwood. As the housing boom commenced, sales of structural products utterly dominated. But as some of the new housing was completed, outdoor products saw sales rise. The data reflects this. So, the expectation is that when free-standing dwelling approvals and commencements slow, the first products to feel the pinch will be the structural products.

The interesting question is when that might come, because despite the calls that the housing boom is over, the latest sawn softwood sales data demonstrates there is life left in the market.

Posted Date: May 30, 2016

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