Sales of locally produced sawn softwood dipped 4.6% over the year-ended October 2022, falling to 3.032 million m3 as nearly all grades experienced annualised sales declines.
Unlike the previous downturn – as the chart below shows – the trend declines are gradual, almost gentle and certainly very orderly. Inventory data is not available, but the prospect is that inventories have been reduced over the last two years.
It may be tempting to consider the gradual decline in sales as some indication of demand gradually falling. That is possible, but not consistent with industry experience, for the most part. What is more likely is that the production system is at capacity. Producers can only sell what they have available, after all.
As the chart here shows, nearly all grades experienced modest declines over the last year. Only two grades experienced growth over the year.
Larger dimension Treated Structural (>120mm) experienced a 4.7% increase, totalling less than 3,200 m3, over the year to total 72,686 m3. Ungraded increased 8.1%, rising 21,000 m3 to hit 280,777 m3 year-ended October.
Grades that saw steepest declines included the besieged Appearance (down 19.0% to 17,314 m3) and Export (down 30.1% to 38,765 m3).
The dominant or largest volume grades all experienced relatively similar declines, consistent with the aggregate falls. Outdoor Domestic fell 4.9% to 307,536 m3, Treated Structural <120 mm fell 4.0% to 719,473 m3 and Packaging slipped 3.2% to 656,580 m3.
Only one of the major grades – Structural <120 mm – experienced a sharp decline, falling 9.1% to 625,389 m3. This grade’s declines continue to be around double those of its Treated sibling over most periods. Once, the dominant production and sales volume, it is gradually becoming the second-placed structural product.
If we are to point to one grade or product of specific interest, it is the Packaging grade. Its decline was smallest among the large volume grades and it now accounts for 21.6% of all sales. The timber packaging market is well beyond a curiosity and increasingly significant for the national economy, as well as specifically for the timber industry.
