Fabricated wood sector tipped to slump 1.4 per cent this financial year

The nation’s $1.7 billion fabricated wood manufacturing industry is expected to return to growth after a decline in revenue of 1.4 per cent in 2024 – 25, though it faces difficulties including plantation tree availability and competition from imports.

According to market research firm IBISWorld’s Fabricated Wood Manufacturing in Australia – Market Research Report (2015-2030), there are currently 101 businesses in the sector. The number of businesses operating and their overall revenues have shrunk by a compound annual growth rate of 4.0 per cent and 0.3 per cent respectively between 2020 and 2025.

The three biggest companies are Australian Panels, Fletcher Building and Forest One Group.

Decreased demand “from downstream manufacturers and greater use of importers” has hurt viability, according to IBISWorld.

“Shrinking plantation tree availability has kept timber prices high while ongoing import penetration is blocking manufacturers from passing costs on to their customers,” a summary explains.

“Dwelling commencements and residential building construction activity have weakened and dampened demand for fabricated wood. Downstream builders have also been straddled with exorbitant costs, adding to woes in construction sector activity.

“With less confidence in this market, fabricated wood manufacturers have struggled to maintain their sales counts.”

Government initiatives were mentioned as one potential way to facilitate more “regulatory and financial resources for replantation efforts.”

A resumption in revenue growth over the next five years is tipped, though the expected rate was not shared.

The sector includes companies making “veneers and plywood, and wood boards and sheets from reconstituted wood fibres, such as wood chips, sawdust, wood shavings, timber slabs and off-cuts” as well as firms that manufacture timber and non-timber laminates.

Picture: credit Rotor DB (CC BY-SA 3.0)