Softwood sales down ninth successive month

Softwood sales down ninth successive month

Annualised sales of domestically produced sawn softwood products declined for the ninth consecutive month in August 2019, slipping to 2.819 million m3, down 11.3% on the year-ended August 2018. Monthly sales in August totalled 240,425 m3, down almost 21% on August 2018 and 3.2% lower than July.

The chart shows the long run of declines in sales, and on close examination of the annualised data, we can also see that the trend down over the last year has been relatively steep, at least when compared with the more gradual rise in sales that commenced in mid-2015.

Fig 6

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In the context of these declines over the recent period, it is useful to look back at the full data series, since the data first began to be collected. The chart below shows the reported sales experience since August 2002. It is slightly fraught as an analysis tool because over time, more domestic producers have joined the series, generally adding volume.

That limitation aside, what may be instructive is that the pace and duration of reported sales declines is invariably steeper and shorter than the long periods over which increases occur.

 

Fig 7

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

 

On that reading at least, we might anticipate that the decline in sales has a little while left to run, but a new plateau may not be especially far away. That may be consistent with the latest anecdotal news that the new housing market has begun to turn the corner and the stronger anecdotes that suggest alterations and additions activity (client enquiries at least) lifted strongly with the onset of Spring.

Turning to annualised data at the product level, the chart below shows that sales of most grades of sawn softwood are lower over the last two years. The interest lies in the details, and here, we identify two factors.

First, the main structural products – Structural <120 mm and Treated Structural <120 mm. These grades continue to ‘duke it out’ for supremacy in the market, but for products that perform the same function, they remain remarkably equal to one another in sales. It looks as though that battle will go the full fifteen rounds. Combined, they are the true heavy-weights, accounting for more than 45% of total sales year-ended August 2019.

Second, the rise of sales of Packaging grades may have slowed in the last year, but sales still rose 4.1% and appear to be continuing to grow. The next item in this edition of Statistics Count will briefly examine the Packaging grade, but suffice to say that at 570,874 m3, the Packaging grade is the potential contender that could in future separate the two main Structural grades.

Fig 8

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

 

 

YE Aug '17

YE Aug '18

YE Aug '19

% Change (2018-2019)

2019 Share

Outdoor Domestic

268,716

248,520

238,577

-4.0%

8.5%

Fencing

99,596

119,648

86,175

-28.0%

3.1%

Appearance

17,929

14,059

15,820

12.5%

0.6%

Structural < 120mm

763,125

741,435

651,942

-12.1%

23.1%

Structural > 120mm

58,162

67,264

53,071

-21.1%

1.9%

Treated Structural < 120mm

713,911

751,090

632,949

-15.7%

22.4%

Treated Structural > 120mm

69,510

52,875

45,032

-14.8%

1.6%

Landscaping

152,480

158,652

124,071

-21.8%

4.4%

Poles

30,399

32,449

32,627

0.5%

1.2%

Packaging

491,503

548,220

570,874

4.1%

20.2%

Ungraded

266,915

309,374

274,517

-11.3%

9.7%

Export

210,553

134,138

93,726

-30.1%

3.3%

Total

3,142,799

3,177,726

2,819,381

-11.3%

 

 

The qualification we must make to analysis of sales of domestically produced sawn softwood products is they are a large part of the market, but not all of it. Domestic sales are necessarily impacted by imports. This applies in particular to the Structural grades, which may well have suppressed domestic sales of those grades over the last year, in a way that is unlikely to have impacted the Packaging grade which faces almost no apparent import competition.

It is tough at the top!