Sales of domestically processed saw softwood products were 8.6% or more than 272,000 m3 lower in 2018-19, than those recorded for the previous financial year. At 2.901 million m3, total sales were rocked by outsized declines for sales of the main structural products, while few grades have been spared the rout.
As the chart shows, annualised sales peaked one year ago in August 2018. Since then sales have steadily declined to the point where annualised sales have now fallen for eight successive months.
To go straight to the dashboard and take a closer look at the data, click here.
The detailed data, shown below, makes it plain that the decline was taken up in some products more than others. Combined, sales of the structural grades (treated and untreated) fell 10.6% to 1.439 million m3, down from more than 1.6 million m3 the year before. Untreated grades experienced a modestly softer fall of 10.2%, compared with the 11.1% decline for the treated grades.
There were however larger declines in sales of some grades. The similar 20.1% drop in Landscaping sales and the 21.9% fall in Fencing sales suggests that around one-fifth of the ‘post-construction’ market has declined. If that is so, it has probably occurred as the big pipeline of new houses has begun to decline. Gardens and fences come after the houses, and there is a limit to how much money a cash strapped and over-leveraged first home buyer can spend outdoors.
To go straight to the dashboard and take a closer look at the data, click here.
| 2017-18 | 2018-19 | % Change | |
| Outdoor Domestic | 247,630 | 238,738 | -3.6 |
| Fencing | 117,059 | 91,376 | -21.9 |
| Appearance | 17,299 | 15,296 | -11.6 |
| Structural < 120mm | 746,316 | 671,985 | -10.0 |
| Structural > 120mm | 65,636 | 57,268 | -12.7 |
| Treated Structural < 120mm | 745,918 | 660,596 | -11.4 |
| Treated Structural > 120mm | 51,835 | 48,771 | -5.9 |
| Landscaping | 161,348 | 128,984 | -20.1 |
| Poles | 31,920 | 33,128 | 3.8 |
| Packaging | 540,844 | 566,618 | 4.8 |
| Ungraded | 299,323 | 289,616 | -3.2 |
| Export | 148,099 | 98,512 | -33.5 |
| Total | 3,173,229 | 2,900,890 | -8.6 |
If we consider sawn softwood sales to be fairly closely tied to the state of the housing market, and especially new builds and renovations, the latest data is no surprise. An 8.3% decline in sawn softwood sales, alongside a 19.6% fall in dwelling approvals might not make a lot of sense, but against the 10.0% fall in free-standing house approvals it fits better.
However, there is a lag effect here that we cannot ignore.
A dwelling approved today may not be built for a year. So, the softening in dwelling approvals today, becomes lower sawn softwood sales sometime later.
Right now, we cannot quantify what will happen next, but when it comes to sales of sawn softwood, given the declines in new dwelling approvals, it seems unlikely the market has found its bottom just yet. A balancing factor will be the levels of imports and this is discussed elsewhere in this issue.
