Forecasts for sales of selected grades of sawn softwood suggest that sales will move sideways over 2020, with a small dip generally expected for the March quarter. However, the forecasts by ABARES have to be considered in the light of them being based on sales data to the end of 2019. They do not take into account the staggeringly difficult events of the first quarter of 2020, or those that are set to unfold in the second quarter.
A summary of the four forecasts for the March quarter is provided in the table below. Given all of the circumstances of early 2020, it is expected subsequent forecasts will reflect tougher trading conditions.
|
Grade |
2019q4 (Actual) |
2020q1 (Forecast) |
Forecast % Change |
|
Treated Structural |
166,480 |
168,195 |
+1.0% |
|
Structural <120mm |
169,496 |
163,559 |
-3.6% |
|
Structural >120mm |
11,355 |
11,850 |
+4.4% |
|
Landscaping |
34,264 |
28,535 |
-16.7% |
The difference between the forecasts can be accounted for by several factors, including the different cycles on which they operate in the house building process, and the changing demand and production profiles between the structural grades, for instance.
The details of the forecasts are provided below.
Treated Structural
Actual sales of in the December 2019 quarter (166,480 m3) were slightly weaker than expected, falling below the November 2019 forecast (167,297 m3) by 0.5% or 817 m3. Actual sales volumes for the December 2020 quarter were inside the 95% prediction interval for the previous four forecasts.
Looking forward, the updated forecasts for the March 2020 quarter onwards have been revised upwards slightly. Sales are expected to rise in the first three quarters of 2020 by 1.0%, 4.6% and 5.2% respectively, before falling by 4.6% in December quarter. Sales in the December quarter of 2020 are expected to be around 6.5% or 10,741 m3 higher than the same quarter last year.
Structural less than 120mm
Actual sales in the December 2020 quarter (169,496 m3) were stronger than expected, exceeding the November 2019 forecast (165,170 m3) by 2.6% or 4,325 m3. Actual sales volumes for the December 2020 quarter were inside the 95% prediction intervals for the previous four forecasts.
Looking forward, the updated forecasts for the December 2019 quarter onwards have been revised upwards. Sales are forecast to fall in the March 2020 quarter by 3.5%, before rising in the June and September quarters by 8.3% and 6.8% respectively. Sales are expected to fall again in the December quarter by 11.7 %. Sales in the December quarter are expected to be around 1.5% or 2,514 m3 lower than the same quarter last year.
Structural greater than 120mm
Actual sales in the December 2020 quarter (11,355 m3) were weaker than expected, falling below the November 2019 forecast (12,961 m3) by 12.4% or 1,606 m3.
Looking forward, the updated forecasts for the March 2020 quarter onwards have been revised downwards. Sales are expected to rise in the first three quarters of the year by 4.4%, 7.8% and 6.2% respectively, before falling by 12.2% in December quarter. Sales in the December quarter are expected to be around 4.9% or 560 m3 higher than the same quarter last year.
Landscaping products
Actual sales in the December 2020 quarter (34,264 m3) were slightly weaker than expected, falling below the November 2019 forecast (34,571 m3) by 0.9%, or 307 m3. Actual sales volumes for the December 2020 quarter were inside the 95% prediction interval for the previous four forecasts.
Looking forward, the updated forecasts for the March 2020 quarter onwards have been revised downwards. Sales are expected to fall in the March 2020 quarter by 16.7% before rising in the remaining quarters by 2.8%, 20.6% and 7.8% respectively. Sales in the December quarter are expected to be around 11.3% or 3,887 m3 higher than the same quarter last year.
