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. 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, 2017–18
The latest ABS industry data indicate that sales and service income generated by the forest product manufacturing industry increased to $23.9 billion in 2017–18, up 3.8% from $23.0 billion in 2016–17. Forest product industries’ sales and service income remains high relative to earlier this decade (Figure 1).
ABS data on industry value added show that the forestry and forest product manufacturing industries together have grown for the fifth consecutive year. Industry value added is a measure of economic activity and industry’s contribution to Australia’s gross domestic product. The total value added by the forestry sector—the combined value added by the forestry and logging industry, and the wood and paper products manufacturing industry—increased in 2017–18, up 6.1% to $9.2 billion (Figure 1). A 12.3% increase in value added by the wood and paper products manufacturing industry (to $7.5 billion) strongly outweighed the decrease in value added by the forestry and logging industry (down 14.5% to $1.7 billion).
Log harvest volume and gross value of production, 2018–19
ABARES has developed estimates for log harvest volumes and values for 2018–19 to expedite the public availability of these data. The next issue of the AFWPS will include 2018–19 log harvest volumes and values based on responses to ABARES gross value of production survey.
After increasing steadily since 2012–13 the volume of logs harvested in Australia has stabilised. The estimated volume of total (hardwood and softwood) logs harvested in 2018–19 decreased slightly to 32.7 million cubic metres, down 0.7% from 32.9 million cubic metres in 2017−18 and 33.2 million cubic metres in 2016−17. The estimated value (at the mill door) of total logs harvested increased to around $2.7 billion in 2018−19, up 2.6% (Figure 2).
The estimated hardwood log harvest volume was 15.3 million cubic metres in 2018–19 (down 0.2% from 2017–18). Based on an estimated 1.4% increase in average hardwood log prices over the year, the total value of hardwood logs harvested was around $1.3 billion (up 1.2% from 2017–18).
The estimated softwood log harvest volume decreased to 17.4 million cubic metres in 2018–19 (down 1.1% from 2017–18). The total value of softwood logs harvested was around $1.5 billion (up 3.8% from 2017–18) based on an estimated 5.0% increase in average softwood log prices over the year.