Softwood forecasts flat and softening through to end of 2017

Latest sales forecasts, based on the sawn softwood data series, show that sales of structural products will be stable through the remainder of 2017, with modest decline anticipated for Landscape products. The analysis, produced by ABARES for FWPA and its members, also show that in general, the forecasts are becoming more accurate, over time.

With sales of Termite treated structural softwood (H2F) having grown significantly over the last decade, forecasts are somewhat more complex than for some other grades. However, as the chart below shows, both of the forecasts to date have been relatively accurate.

For the December quarter, the forecast was 4.47% higher than the actual delivered. Actual sales were 185,901 m3. 

Displayed in the red line above, the forecast for the March quarter of 2017 was for Treated H2F sales to total 182,910 m3. Actual sales were 185,917 m3, meaning the forecast was out by an entirely satisfactory 1.6%. 

To the end of 2017, forecasts are that sales will rise, as follows.

* inc. MQ’17 actual

If the forecasts are met, combined with the March quarter actuals, sales of 724,636 m3 will be 1.5% higher than for 2016.

Although somewhat softer, it is not an entirely dissimilar situation for the untreated sibling of H2F. Untreated sawn softwood <120 mm sales totaled 181,532 m3 in the March quarter of 2017. The forecast, shown below, was for sales to be 5.5% lower at 172,021 m3.

On a full-year basis, taking into account the March quarter actuals, the forecast is that sales will total 766,761 m3 as set out in the table below. If that eventuates, sales will be 4.2% lower in 2017, than was the case in 2016.

* inc. MQ’17 actual

Turning to the third grade for which forecasts are prepared – landscape wood products – the forecasts have to date been higher than the actual sales volumes., as the chart below shows. In the March quarter of 2017, the forecast was the sales would amount to 34,386 m3. Actual sales were 9.5% lower than the forecast at 31,110 m3.

On a full-year basis, taking into account the March actuals, the forecast is that sales will total 159,513 m3 as set out in the table below. If that eventuates, sales will be 8.8% higher in 2017, than was the case in 2016.

* inc. MQ’17 actual

If nothing else, these forecasts show the challenges of predicting market behavior. However, these are early days, with plenty of opportunities for further development and for analysis of trends over longer periods.