Packaging timber rarely makes headlines, but as the material used predominantly for pallets, crates, and other packaging products, it sits at the intersection of manufacturing, retail, agriculture, and freight. Because it moves with goods throughout the supply chain, packaging timber production can provide a useful indicator of broader economic activity. Recent softwood sales data, together with weighted average prices for green and dry packaging products, tells a story that closely mirrors Australia’s recent economic cycle.
Figure 1: Packaging Products (12-Month Rolling Volume) and Average Prices
Source: FWPA Data
A Downturn That Mirrors the Broader Economy
Over the past two years, packaging timber volumes experienced a notable decline before rebounding strongly. Volumes fell from 830,288 m³ in June 2024 to a low of 782,593 m³ in May 2025, representing a decline of approximately 5.7%. This contraction was followed by a sharp recovery, with volumes rising almost to 931,126 m³ by May 2026, an increase of nearly 19% from the trough and around 12% above the starting point.
Average prices followed a similar trajectory. After easing from $357.85/m³ to a low of $340.04/m³ between December 2024 and February 2025, prices steadily recovered to reach $371.87/m³ by May 2026, an increase of approximately 9.4% from the bottom of the cycle.
The slowdown in packaging timber volumes during mid-2024 to mid-2025 coincided with a period of subdued economic momentum. High interest rates weighed on household spending and business investment, while freight and logistics activity softened across parts of the economy. Demand for pallets and packaging products, which facilitate the movement of goods through supply chains, slowed accordingly.
The Recovery: Monetary Easing Flows Through the Economy
From mid-2025 onwards, packaging timber volumes turned decisively upward, aligning closely with the broader economic recovery. Following the RBA monetary easing cycle, lower borrowing costs began supporting household consumption, dwelling investment, and business activity.
The volume recovery was substantial. Between June 2025 and May 2026, packaging timber sales increased from 791,737 m³ to 931,126 m³. This sustained growth reflects stronger freight movements and increased demand across sectors that utilise packaging products, including manufacturing, agriculture, construction, and retail.
The timing corresponds closely with improving economic conditions. As real household incomes recovered and private demand strengthened, the flow of goods through supply chains increased. Packaging timber, as a key input into logistics and distribution networks, benefited directly from this uplift in activity.
Table 1: Packaging volumes and average prices (summary data quarterly)
Source: FWPA Data
Note: Volume in 12-month rolling data and prices are an average of dry and green products.
Prices also strengthened throughout the recovery period, rising from around $340/m³ to more than $370/m³. This likely reflects a combination of stronger demand, tighter market conditions, and the pass-through of broader cost pressures across supply chains.
A Note of Caution
While recent trends have been encouraging, the outlook is less certain. Some analysts have noted that several factors supporting growth through 2025 may fade during 2026. Higher energy costs, ongoing cost-of-living pressures, and a potentially slower pace of monetary easing could temper growth in private demand.
If economic activity moderates, the strong growth in packaging timber volumes observed through early 2026 may prove difficult to sustain. Given its close connection to freight, manufacturing, retail, and agricultural activity, packaging timber demand should continue to provide valuable insights into the direction of the broader economy.
The Takeaway
Packaging timber may be a modest market segment, but its economic significance extends far beyond the timber industry. Its volumes provide a useful barometer of economic activity. The decline through late 2024 and early 2025, followed by a strong recovery during 2025 and into 2026, closely reflects the broader cycle of slowing growth and subsequent recovery in private demand. It serves as a reminder that some of the clearest signals about the economy come not from headline indicators alone, but from the everyday products that keep goods moving across the country.
