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Sales of locally produced sawn softwood lift on prior year

In the first signs of a possible return to growth, sales of locally produced sawn softwood lifted in November and December, compared with the corresponding periods in 2018. November was the first month since October 2018 to record a sales increase compared to the prior year. It is early signs yet and the impact of the fires is still to flow through, but the signs of demand recovery are becoming stronger.

Sales in November totalled 262,474 m3, up 5.0% on November 2018, recording the highest monthly sales total since October 2018. That result may have passed unremarked had it not been that December’s sales totalled 206,597 m3, up 18.5% on December 2018, albeit lower than November for normal seasonal reasons.

Sales for 2019 (year-ended December) totalled 2.843 million m3, down 8.5% on 2018, but above the low point of 2.799 million m3 recorded in October 2019. The chart below shows the recent experience.

Fig 4

Fig 4

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

 

The chart demonstrates that the market is well off its highs, but it also indicates a market whose sales volumes dipped, then plateaued and have since begun to rise. We have to anticipate that the combination of seasonal and event-related factors, especially the impact of the fires, will see sales dip in the first quarter of 2020.

An additional caution is required and is considered elsewhere in this edition of Statistics Count. The Australian dollar has, after a period of uncommon stability, returned to its more heavily traded status and has fallen lower against most major trading partners. The impact on highly competitive products like sawn softwood may have removed some imports from the supply line and could be a factor in encouraging growth in local sales.

It is instructive to examine the specific make-up of sales over the recent period, in order to determine any product and end-use trends. As the chart below provides some clues, the major grades – the Structural and Treated Structural – took the bulk of the downturn, linked closely to domestic housing trends.

Fig 5

Fig 5

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

 

Just as telling, the year-end data shown above also indicates that the major framing grades also experienced the bulk of the growth in the final quarter of 2019. Sales of Structural <120mm totalled 671,673 m3 at the end of December, up 2.5% on sales for the year-ended September. Sales of Treated Structural <120mmrose 1.0% over the same period, to reach 628,420 m3.

Other grades to experience some growth in the final quarter of 2019 included Outdoor Domestic (+2.4%), Fencing (+0.6%), Poles (+3.1%) and Packaging (+1.6%). Total sales were up 0.9% from the end of September to the end of December.

Caution is required and the fires have taken their toll, but the green shoots of market recovery are now on the horizon.

Posted Date: February 11, 2020

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