The latest softwood sales forecasts point to a very modest recovery over the 2019-20 financial year. Recent forecasts have struggled to reflect actual sales, representative of the challenges of a market under the stresses created by falling demand. Over the next year, forecasts for two grades point down, while two grades show anticipated growth.
In the June quarter of 2020, aggregate Treated Structural sales are forecast to be 5.0% higher than the 169,193 m3 recorded in the June quarter of 2019. The forecast, shown in the chart below is for sales to reach 177,583 m3 in the June quarter of 2020.
As the chart shows, actual sales of aggregate treated structural pine in the March 2019 quarter (169,136 m3) were weaker than expected, falling below the April 2019 forecast (171,060 m3) by 1.1 per cent or 1,924 m3.
Looking forward, the updated forecasts for the September 2019 quarter onwards have been revised downwards.
Sales are forecast to grow in the September 2019 quarter by 5.2 per cent to 177,921 m3 and decrease in the December 2019 quarter by 4.5 per cent, in line with the seasonal construction cycle. Sales are expected to hold in the March 2020 quarter before increasing in the June 2020 quarter by 4.4 per cent, finishing, as set out above, at around 177,583 m3.
The table below shows how the forecasts have performed since they commenced.
Sales of Structural <120 mm pine (untreated) are forecast to decline 4.2% to the June quarter 2020, compared with the 171,681 m3 actual sales recorded for the June quarter 2019. The chart below shows the details of the forecasts which have recently been quite volatile.
Actual sales of structural pine less than 120mm in the June 2019 quarter (171,681 m3) were stronger than expected, exceeding the April 2019 forecast (156,817 m3) by 9.5 per cent or 14,864 m3.
Looking forward, the updated forecasts for the September 2019 quarter onwards have been revised upwards. Sales are forecast to rise in the September 2019 quarter by 6.0 per cent to 181,911 m3 before falling in the December 2019 and March 2020 quarters by 11.8 per cent and 4.5 per cent, respectively. Sales are expected to increase by 7.3 per cent in the June quarter of 2020 to finish at around 164,487 m3.
It might be expected that the smaller volume grades would be more prone to variation from forecast to actuals. More observations could result in improved accuracy and so on. But in fact, as the data for Structural >120 mm (untreated) shows, that is not necessarily the case.The table below shows how the forecasts have performed since they commenced.
Sales of this grade are forecast to decline 3.7% to the June quarter 2020, compared with the 13,967 m3 actual sales recorded for the June quarter 2019. The chart below shows the details of the forecasts which have recently been quite volatile.
Actual sales in the June 2019 quarter (13,967 m3) were stronger than expected, exceeding the April 2019 forecast (13,154 m3) by 6.2 per cent or 812 m3.
Looking forward, the updated forecasts for the September 2019 quarter onwards have been revised upwards. Sales are forecast to increase in the September 2019 quarter by 7.4 per cent to 15,001 m3 before falling in the December 2019 and March 2020 quarters by 12.0 per cent and 4.8 per cent, respectively. Sales are expected to increase again in the June 2020 quarter by 7.0 per cent, finishing at around 13,447 m3.
Sales of Landscaping products are forecast to rise 15% higher by the June quarter 2020, compared with the 26,561 m3 actual sales recorded for the June quarter 2019. The chart below shows the details of the forecasts which have recently been quite volatile.
As the chart shows (and the table below confirms), forecasts of this grade are routinely higher than actual sales, and have been over-stated by double-digit percentages for each of the last four quarters.
Actual sales of landscaping products in the June 2019 quarter (26,561 m3) were weaker than expected, falling below the April 2019 forecast (30,822 m3) by 13.8 per cent, or 4,261 m3. Despite the apparently large variation from the forecast, actual sales volumes for the June 2019 quarter were inside the 95 per cent prediction interval for the previous forecast but outside of the 95 per cent prediction intervals for earlier forecasts.
Looking forward, the updated forecasts for the September 2019 quarter onwards have been revised downwards. Sales are expected to increase in the September quarter by 25.1 per cent to 33,230 m3 and increase again in the December quarter of 2019 by 7.9 per cent respectively. Sales are then expected to fall in the March quarter of 2020 by 16.7 per cent, in line with the historic seasonal cycle, before recovering in the June 2020 quarter to finish at 30,559 m3.
