The Australian sawn timber industry is experiencing a temporary threat from imports as a result of a strong dollar and a global surplus of timber following the Global Financial Crisis, according to independent economic forecaster and industry analyst, BIS Shrapnel.
In the two years to 2011, imports have increased by 30 per cent, according to the report - BIS Shrapnel’s Sawn Timber in Australia, 2012 to 2026.
According to the report, in the last two decades there has been a significant reduction in sawn timber imports, as domestic production capacity has expanded. At the same time, exports have grown rapidly in the past five years.
Based on a survey of builders, other end users and merchants, the report analyses the significant differences in the hardwood and softwood sawn timber sectors.
The report found that Australian producers are currently facing increased pressure from imports at a time when the domestic housing market has been rather sluggish, and when domestic producers have sufficient capacity to supply much of the domestic market.
However, imports are not a significant long term threat, as they are still well below the historical levels of 20 years ago, says BIS Shrapnel.
BIS Shrapnel believes that 2013 will continue to present challenges from imports but by 2014, international and domestic conditions are expected to be more favourable to producers as the dollar declines. Global demand for timber will also improve in response to a stronger housing market in the US and strong demand in Asian markets.
Average annual domestic demand for sawn timber is forecast to increase from 4.9 million to 5.4 million cubic metres between 2012 and 2015, and rise again in the decade to 2026, from 5.4 million to 5.7 million cubic metres.
BIS Shrapnel report author and senior manager, Bernie Neufeld, says ““Unless domestic capacity is significantly increased to meet projected demand then imports will likely rise again over the long term. “
Mr Neufeld believes that the Australian industry has the potential to accommodate new mills to service the domestic market and potential export markets and that there is a need to expand the plantation resource to allow this to happen.
