New home building is a key driver of demand for softwood timber
NSW has the largest softwood plantation area in Australia
Production was estimated to decrease approximately 6% year-on-year, with the gross value of logs harvested estimated to be $470 million. This was due to a decrease in the national volume of logs harvested for softwoods. Demand for softwood remained high, with record residential construction over the year.
At the date of publication, detailed industry information for NSW is not available, consequently commentary in this section for production, plantations and prices analyses 2016–17 industry trends.
The total log harvest was 5,918,000 cubic metres in 2016–17, up 5.9% year-on-year. Production of softwood logs accounted for the majority of the harvest, at 4,967,000 cubic metres, up 6.8%. Log production from hardwood native forests and plantations was 951,000 cubic metres, up 1.3%3.
NSW forestry has undergone a long-term shift away from the production of hardwood logs towards softwood logs. NSW softwood production is mostly sawlogs (2,800,000 cubic metres), followed by pulp log (2,069,000 cubic metres)3.
New home building is a key driver of demand for softwood timber. Dwelling house commencements in NSW reached a decade high in 2016–17, with 29,500 houses commenced construction. In the year ending March 2018, dwelling commencements remained high, with approximately 29,400 new houses commenced construction18.
NSW had 394,200 hectares of commercial plantations in 2016–17. This was the second largest total plantation area in Australia, behind Victoria at 420,900 hectares. NSW has the largest softwood plantation area in Australia3, with 307,100 hectares planted to softwood species.
The KPMG Pine Log Price Index for June 2017 showed lower prices for medium and large sawlogs, down 1.3% and 3.2% year-on-year respectively. Pulp log prices were also slightly lower, down 0.5%. Small and intermediate sawlogs had small price gains. Medium sawlogs are the highest value product in the index, and showed lower volumes.
The Indufor Timber Market Survey showed price growth across all manufactured timber products in the year to March 2018. Structural softwood timber had increases between 8.6% for treated pine and 14.9% for MPG10 products. Outdoor softwood timber had increases between 4.9% for treated sleepers and 12.7% for decking62. This is partly the result of higher input prices. The wood product manufacturing input price index increased approximately 4.3% in the year to March 201819.
NSW forestry exports in 2017–18 were $146.9 million, primarily consisting of wood in the rough. Exports increased 6.2% year-on-year. China was the main destination for forestry products, at $127.3 million54.
Australian forestry exports reached a 20-year high, increasing by 13.5% to approximately $2.1 billion in 2017–18. China and Japan were the largest markets, worth $1.4 billion and $497 million respectively, up 10.7% and 36.3% over the past year54. Australia was the largest exporter of woodchips in the world94. Japan was a major destination for woodchips. Woodchip exports are the single largest forestry export by value, at $1,328 million in 2017-18, noting that state level details of exports are confidential.
In 2017–18, employment in forestry and related industries reached an estimated 26,000, 2,000 of which were directly in forestry and logging. Overall, employment across the sector was up by 5,000 compared with the previous year, with these positions almost entirely in other wood product manufacturing15.
Industry value added (measured as production less intermediate inputs) was estimated at $2.5 billion, an increase of 4% over the year. Among the sub-industries, value added was highest in paper and paper product manufacturing, at $974.8 million (unchanged from the previous year). Other wood product manufacturing had the largest growth in value added, up 6% over the year to $883.6 million.
|Value Add est. ($m)ac||Change (%)||Employment est.y||Change (%)|
|Forestry & Logging||271||3%||1,990||-3%|
|Log sawmilling & timber dressing||358||3%||3,589||37%|
|Other Wood Product Manufacturing||834||6%||16,621||50%|
|Total Paper & Paper Product||973||0%||3,770||-27%|