Latest Australian Timber Market Survey results out

Thursday 28 Mar 2013

URS has released the December quarter 2012 edition of the Australian Timber Market Survey (TMS) report. The TMS reports timber price movements collected through a quarterly survey of the buying prices of timber products by timber wholesalers and merchants in eastern Australia.

Prices for major structural softwood timber products MGP10 and MGP12 changed only marginally in the December quarter 2012, with movements ranging from -0.3% to 0.7%. Over the 2012 calendar year, prices for MGP10 products fell by around 5.4% to 5.9% and prices for MGP12 products fell by around 3.9% to 7.0%. Meanwhile, prices for outdoor softwood timber products, panel products and engineered wood products remained relatively stable.

TMS results showed mixed price movements for hardwood flooring and joinery appearance grade products over the six months to December 2012, which may reflect relatively subdued spending on home renovations. Price movements for structural hardwood products varied over the second half of 2012. Structural F17 prices ranged from 0.4% to 2.3% across the dimensions surveyed, reflecting mixed results within each of the eastern states. Meanwhile, structural F27 prices recorded an increase of 0.5%.

Australia’s economic growth remains relatively strong compared to other developed countries. The latest RBA forecast for the domestic economy shows gross domestic product (GDP) growth reaching 3.5% over the 2012 calendar year and then softening to 2.5% over 2013. However the strong Australian dollar continues to affect the competitiveness of the manufacturing sector.

Over the 2012 calendar year, the Reserve Bank of Australia reduced the Official Cash Rate (OCR) by a total of 1.25%, taking the OCR down to 3% which matches the lowest rate that was implemented following the global financial crisis (GFC) in 2009. Activity in the housing market remains at relatively low levels and is yet to show any significant response to interest rate reductions. The number of new dwelling construction approvals increased by around 3.8% over the December quarter to be relatively stable for the 12 months to December 2012. Growth in dwelling construction approvals was driven by a 9.9% increase in private sector non-house approvals. The number of private sector house construction approvals fell by around 1.3% over the quarter, to be around 4.4% lower for the year.

The latest available data on spending on housing alterations and additions, which gives an indication of the performance of the home renovation and hardwood timber markets, shows Victoria as the only state with stable spending on alterations and additions over the 12 months to September 2012. Spending on alterations and additions declined in NSW (-12.3%), Queensland (-3.2%), South Australia (-1.5%), Western Australia (-15.5%) and Tasmania (-3.9%).

For more information, a copy of the Timber Market Survey report is available for download from the URS Asia-Pacific website by clicking here.
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