The second ABARES quarterly forecasts show continued strong growth in sales of termite treated structural pine (otherwise known as H2F), outstripped forecasts by 6.1% in the September quarter. Meanwhile, sales of the untreated Structural <120mm grade were 2.8% lower than forecast. Although sales of both are forecast to be lower in the December quarter, by the September quarter of 2017, H2F sales should be significantly higher, while sales of the untreated equivalent will continue to slide.
The details of the ABARES forecasts for each of the main grades is described below:
Termite treated pine (H2F)
Actual sales of termite treated pine in the September 2016 quarter (200,281 m3) were much stronger than expected, exceeding the September quarter forecast (188,107 m3) by 6.5 per cent, or 12,173 m3, and falling outside of the forecast error bounds in the September 2016 quarter.
Looking forward, the new forecasts for the December 2016 quarter onwards are higher than the previous forecasts. Sales of termite treated pine are forecast to fall by 2.8 per cent to 194,598 m3 in the December 2016 quarter, but forecast to recover strongly to reach 206,481 m3 in the September 2017 quarter.
Untreated structural pine (<120mm):
Actual sales of Untreated structural pine in the September 2016 quarter (200,277 m3) were slightly weaker than expected, falling below the September quarter forecast (205,937 m3) by 2.8 per cent or 5,659 m3. However, actual sales in the September 2016 quarter were within the forecast error bounds.
Looking forward, the new forecasts for the December 2016 quarter and onwards are very close to the previous forecasts. Sales of category 1 untreated pine (<120mm) are forecast to fall by 11.3 per cent to 177,637 m3 in the December 2016 quarter, before recovering slightly to reach 183,684 m3 in the September 2017 quarter.
Landscape wood products
Actual sales of landscape wood products in the September 2016 quarter (39,443 m3) were weaker than expected, falling below the September 2016 quarter forecast (42,482 m3) by 7.2 per cent or 3,039 m3. However, actual sales in the September 2016 quarter were within the forecast error bounds.
Looking forward, the new forecasts for the December 2016 quarter onwards are very close to the previous forecasts. Sales of landscape wood products are forecast to increase strongly in the December 2016 quarter, growing by 13.8 per cent to 44,868 m3, before increasing a further 3.8 per cent to 46,565 m3 in the September 2017 quarter.
Untreated structural pine (>120mm):
Actual sales of Untreated structural pine in the September 2016 quarter (13,628 m3) were much weaker than expected, falling below the September 2016 quarter forecast (17,424 m3) by 21.8 per cent or 3,796 m3. However, the actual share of category 2 untreated pine sales in total untreated pine sales in the September 2016 quarter (the basis for forecasting sales of category 2 untreated pine) was within the forecast error bounds. This highlights the degree of uncertainty around forecasts of category 2 untreated pine sales, which is the result of sales of category 2 untreated pine being relatively volatile.
Looking forward, the new forecasts for the December 2016 quarter and onwards are significantly lower than the previous forecasts. Sales of category 2 untreated pine are expected to decrease further in the December 2016 quarter, falling by 1.7 per cent to 13,390 m3, before recovering (partially) to reach 13,626 m3 in the September 2017 quarter.
Direct copy of the ABARES forecast graphs is available in excel format click here
