• News

Monthly sawn softwood sales approach record – volatility observed

Australia’s monthly sales of domestically produced sawn softwood products recorded their second highest volume in June 2018, at 294,180 m3. The result means year-end sales were 3.173 million m3, a modest 1.6% higher than a year earlier.

As the chart below shows, the June sales data, and the year-end total for that matter, feed into the evidence that sales of sawn softwood have been stable but still growing for much of the last year.

For example, the monthly sales in June, though very high and just 3,208 m3 or 1.1% lower than for the record month of November 2016 of 297,388 m3, were also only 5.4% higher than in May 2018. There is however, no way to deny the strength in local sales, as they were also 15.3% higher than in June 2017.


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

We cannot either ignore seasonality in sales – and in the housing construction pipeline – but those are well understood and easily recognized in the data and charts.

The near to record monthly sales result for June 2018 underscores two important points.

First, the residual strength of the Australian new housing market continues pretty much unabated and the pipeline of work continues to flow with it, placing the domestic supply-chain under continued pressure.

Second, and importantly, sales volatility from one month to the next is exacerbated by being close to peak supply. It does not, in the current situation, take very much for local sales to slip back. In many respects, this is the place in the market that has been taken up by rising sawn softwood imports, as later items in this edition of Statistics Count will demonstrate.

When we examine the year-end sales data on a grade basis, as the chart below shows, we might begin to get a sense that despite the overall growth and stability, there is reasonable volatility for some grades.


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

In particular, when we look more closely at the data, we can see that there are grades for which there appears to be more movement, month-on-month, than for other grades.

This was a topic recently addressed by FWPA, with a stakeholder, who queried the volatility between two grades in particular – the big ones – Treated Structural <120 mm and Untreated Structural <120 mm.

Drilling into that data specifically, we can see some of the volatility in the charts below.


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


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

It is clear that both of the charts show – even on this short run of two years – that the main structural grades experience month-on-month variation that has both seasonal and other drivers.

Removing the seasonal variations and especially, avoiding the notoriously slow January and December allows the use of some analytical tools to assess relative volatility between the two grades.

In particular, the answer to the question, is one of these grades more variable than the other?

The best measure of this volatility is the standard deviation (SD). The simplest way to look at this is to overlay the SD on the mean or average sales volume over the 10 months in question.


However because the mean volume for the Treated grade is significantly smaller for the years 2012 to 2015, the straight comparison of SD can be misleading. To provide a better context, we need to look at the coefficient of variation, which is a ratio of the SD to the mean, and is shown below.

Essentially, the higher the bar, the greater the volatility.


Graphically, we can now observe that in all but 2017, the Untreated monthly sales are less volatile.

In a future edition of Stats Count, we will consider volatility and the reasons for it, in more detail.

For further details on the use of volatility assessments and their application in market analysis, contact Jim Houghton,  FWPA’s Economics & Statistics Manager.


Posted Date: August 29, 2018

Related Resources

Inflation rose in the March quarter
  • FWPA
  • News

Australia’s headline measure of inflation, the Consumer Price Index…

Falling housing approvals demonstrate difficulty of reaching 1.2 million target
  • FWPA
  • News

Australia’s dwelling approvals fell to 160,844 separate approvals f…

Housing starts at 11 year low
  • FWPA
  • News

Annual starts for new houses fell below 100,000 per annum for the first…