(Please note due to issues with the data dashboard we are not able to provide a direct link to the graphs used in this article. However most of these graphs can be accessed through the FWPA data dashboard).
In July, sales of locally produced sawn softwood lifted to a twenty-month high, on an annualised basis, totalling 3.084 million m3. In July, local sales were reported at a record 306,726 m3, continuing the remarkable news in the pandemic era.
The one cautionary note with this data is that it needs to be matched up with the import data – see the prior item in this edition – to observe an apparent consumption. Put simply, local sales are up, but imports are down right now.
The upturn in local sales is evident in the chart below.
Examining this data from a grade point of view assists us to understand what is being done with the sawn wood and perhaps even how the different end-use sectors are performing.
The chart below shows the last decade’s sales experience, on an annualised basis. This shows that the structural grades have been performing much as expected – dominating the Australian market. They are the grades building the nation and their role is more stable, in most time periods than all of the other grades.
More recently however, we can see that the aggregate growth has been more significant for non-structural grades. The obvious grade of interest is ‘Packaging’ shown in the large blue band, but it is not the only grade to note.
The table below provides an opportunity to understand the sales data more closely, and over a shorter time period.
|
YE July 2019 |
YE July 2020 |
% Change |
|
|
Outdoor Domestic |
239,850 |
272,643 |
13.7% |
|
Fencing |
89,830 |
104,032 |
15.8% |
|
Appearance |
14,929 |
16,646 |
11.5% |
|
Structural < 120mm |
668,826 |
706,612 |
5.6% |
|
Structural > 120mm |
56,357 |
53,195 |
-5.6% |
|
Treated Structural < 120mm |
651,708 |
621,934 |
-4.6% |
|
Treated Structural > 120mm |
49,238 |
44,136 |
-10.4% |
|
Landscaping |
126,226 |
131,027 |
3.8% |
|
Poles |
32,871 |
37,942 |
15.4% |
|
Packaging |
571,382 |
711,476 |
24.5% |
|
Ungraded |
284,166 |
269,055 |
-5.3% |
|
Export |
95,964 |
115,347 |
20.2% |
|
Total |
2,881,348 |
3,084,045 |
7.0% |
The first feature to note is that at the end of July, reported local sales were up 7.0% on the prior year. That is a solid result that still suggests that pre-pandemic, the housing industry was on its way to recovery and would experience a soft landing.
Interestingly, in the midst of the pandemic, it seems that expectation still holds true. Remarkable!
Second, and maybe this will be the most important point, sales of packaging grades (industrial wet, wides and so on) lifted a whopping 24.5% over the year, to total 711,476 m3. That makes the packaging grades the largest single component of total sales for the year-ended July 2020.
Of course, when compared with the combined structural grades (all four), packaging is only half, but nonetheless, the last year has seen a big move, for what was already a big grade!
Growth in Export sales (+20.2%) are also significant, as is the growth in Outdoor Domestic (+13.7%) and Fencing (+15.8%) over the year. The latter two patterns of growth suggest a maturing housing market where there has been more emphasis on ‘finishing’ properties.
This seems to be supported by declining sales of three of the four structural grades, which in aggregate were just 0.02% (252 m3) lower than the prior year.
Based on the reported data, sawn softwood sales are progressing well right now, into multiple sectors of the local economy. That seems a piece of good news.
