Sawn softwood sales continue to boom

Unsurprising perhaps, given the still record high levels of building activity in Australia, but sales of domestically produced sawn softwood continue to be very strong. For the year-ended August 2017, reported sales were 1.7% higher than a year earlier, at 3,142,799 m3. This is only 0.4% below the record achieved for the year-ended March 2017.

It is, in many respects, too easy to get caught up in the housing market commentary that reports an imminent bust. It is important to look to data that has a reliability to it that points to actual conclusions. The conclusion we can draw from the chart below is that reported domestic sawn softwood sales have plateaued, but are yet to slip.

fig 31

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The stability in recent sales can be observed in the monthly sales volumes. In August 2017, reported sales totaled 293,443 m3, up 3.7% on sales in August 2016. Indeed, the only month in 2017 in which sales were lower than the corresponding month in the prior year was April.

Whether a combination of new builds and alterations and additions or not, we should call it plain: Australia’s demand for sawn softwood products remains very strong.

In that context, it is important to examine the make-up of those sales, to see if we can elicit where the strength in sales might lie.

There has been some important growth, as the chart below shows, in sales of Landscaping grade softwood (mainly sleepers and retaining wall materials), which were up 2.8% to 154,686 m3 for the year-ended July 2017 and its closely allied Fencing products were up 10.1% to 99,596 m3. However, the big news is in the structural and framing timbers market.

fig 32

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

In both the treated and untreated formats, the larger sizes (>120 mm) have experienced declines, while the smaller sizes (<120 mm) have experienced growth.

The table below shows the relative experiences of these mainstays of sawn softwood sales.

 Grade  YE Aug ’16 (m3)  YE Aug ’17 (m3)  % Change
 Structural <120 mm  745,165
 763,125  +2.4
 Treated Structural <120 mm  662,931  709,435  +7.0
 Structural >120 mm  58,364  58,162  -0.3
 Treated Structural >120 mm  79,458  72,441  -8.8


It is important not to overdraw one’s conclusions, however, sawn softwood sales data suggests that the market continues to shift towards smaller dimension lumber. This could be a supply-side factor, but it might also be indicative of raw demand, and thus pointing to the end destination of the timber and the dwellings that in the main it is holding up.