The growth of Australia’s forestry sector depends on key domestic and international markets and generally follows the economic cycle. In Australia, as in many developed countries, domestic dwelling construction markets provide a strong demand driver for most wood products. Broader consumption of wood products in Australia is influenced by international trade and competition between domestic and imported wood products.
Exports contribute significantly to the forestry sector’s performance. Various factors influence demand for Australia’s forest and wood products overseas, including country-specific economic drivers, exchange rates and comparative prices of products from competing countries.
Income and value added, 2016–17
The latest ABS industry data indicate that sales and service income generated by the forest product manufacturing industry decreased to $23.0 billion in 2016–17, down 2.9 per cent from $23.7 billion in 2015–16. This decline follows two years of strong growth in forest product industries’ sales and service income, which remains at high levels relative to recent years (Figure 1).
ABS data on industry value added shows that the forestry and forest product manufacturing industries together have grown for the fourth consecutive year. Industry value added is a measure of economic activity and industry’s contribution to Australia’s gross domestic product. The value added by the forestry sector increased in 2016–17, up 4.4 per cent to $8.8 billion (Figure 1). A record 35.2 per cent increase in value added by the forestry and logging industry (to $2.1 billion) strongly outweighed the modest decrease in value added by the wood and paper products manufacturing industry (down 2.4 per cent to $6.7 billion).
Log harvest volume and gross value of production, 2017–18
ABARES has developed estimates for log harvest volumes and values for 2017–18 to expedite the public availability of these data. The next issue of the AFWPS will include 2017–18 log harvest volumes and values based on responses to ABARES gross value of production (GVP) survey.
The volume and value of logs harvested in Australia is estimated to have stabilised in 2017–18. The estimated volume of total (hardwood and softwood) logs harvested decreased slightly to 32.9 million cubic metres in 2017–18, down 0.7 per cent from 33.1 million cubic metres in 2016−17. The estimated value (at the mill door) of total logs harvested was $2.6 billion in 2017−18, down 0.7 per cent (Figure 2).
The estimated hardwood log harvest volume was 15.4 million cubic metres in 2017–18 (down 0.6 per cent from 2016–17). Based on an estimated 0.9 per cent decrease in average hardwood log prices over the year, the total value of hardwood logs harvested was $1.2 billion (down 1.5 per cent from 2016–17).
The estimated softwood log harvest volume decreased to 17.6 million cubic metres in 2017–18 (down 0.8 per cent from 2016–17). The total value of softwood logs harvested was $1.4 billion (no change from 2016–17) based on an estimated 0.8 per cent increase in average softwood log prices over the year.