Domestically produced sawn softwood product sales rose 1.1% over the year-ended August 2018, totalling a record 3.178 million m3. Sales for August were a record 302,392 m3, underscoring the persistence of demand in what remains a very strong home building market.
The year-end sales data is most impressive from the perspective of capacity. After the closure of the Morwell sawmill in the second half of 2017, capacity was effectively reduced. Sawn softwood production was already near its historical peaks and within reach of capacity limitations. Any growth from that point is testament to the sector’s underlying capabilities, and also to the resilience of demand.
The chart below shows the continued growth in total sales of sawn softwood.
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We need to look beyond the aggregate and into the details to see what has been driving sales. Has it been continued growth in sales of structural timber, or could it be other grades that are holding growth up?
The chart below shows year-end sales for August 2017 and 2018, and the table below is the data supporting the chart. Together they provide the answer: the 1.1% aggregate growth has been fuelled by both modestly increased structural sales and improvements in sales of other grades, along with a handful of notable reductions.
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| Grade | 2017M08 | 2018M08 | % Change |
| Outdoor Domestic | 268,716 | 248,520 |
-7.5 |
| Fencing | 99,596 |
119,648 |
20.1 |
| Appearance | 17,929 |
14,059 |
-21.6 |
| Structural < 120mm | 763,125 |
741,435 |
-2.8 |
| Structural > 120mm | 58,162 |
67,264 |
15.6 |
| Treated Structural < 120mm | 713,911 |
751,090 |
5.2 |
| Treated Structural > 120mm | 69,510 |
52,875 |
-23.9 |
| Landscaping | 152,480 |
158,652 |
4.0 |
| Poles | 30,399 |
32,449 |
6.7 |
| Packaging | 491,503 |
548,220 |
11.5 |
| Ungraded | 266,915 |
309,374 |
15.9 |
| Export | 210,553 |
134,138 |
-36.3 |
| Total | 3,142,799 | 3,177,726 | 1.1 |
Any assessment of sawn softwood sales must start with the structural grades. In aggregate, they grew 0.5% over the year-ended August, reaching 1.613 million m3. The growth is consistent with the 1.1% aggregate growth, which is no surprise given the structural grades account for close to 51% of total sales.
However, as the data shows, there has been some variation in the distribution of sawn structural softwood sales. The Treated Structural <120 mm grade saw sales rise 5.2% to entrench its now leading position , with sales reaching 751,090 m3.
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While commencing with the structural grades, there is great interest in those grades that recorded the most significant increases over the last year.
Sales of Fencing grade material rose 20.1% to 119,648 m3, an increase of just over 20,000 m3, and the Packaging grade saw sales up 11.5% to 548,220 m3, increasing almost 57,000 m3.
Grades that experienced declines were Outdoor Domestic, sales of which were 7.5% lower at 248,520 m3, recording a decline of 20,196 m3 and a 36.3% fall in sales of Export grade, which declined to 134,138 m3, a large fall of 76,415 m3.
There is some flexibility within these definitions, which makes attribution somewhat challenging. What makes it more difficult still is that there is a long pipeline of housing construction underway.
One consideration may be that the emphasis turned to maximizing structural supply after the Morwell closure, shifting the patterns of production in sawmills, within the non-structural grades.
