Environmental concerns regarding sustainable forest management practices are likely to challenge industry operators over the next five years.
Melbourne, Australia (PRWEB) February 20, 2015
Operators in the Logging industry in Australia play a crucial role in many of Australia’s wood product industries. Logs are the main input into sawmilling, which supports a range of downstream timber-based activities. According to IBISWorld industry analyst Spencer Little, “the logs harvested from Australian timber plantations and native forests are processed into paper, plywood, veneer, sawn timber, reconstituted boards such as particleboard and hardboard, and other wood products such as poles, posts and piles.” Wood products are often used as inputs into other activities, such as building construction and furniture manufacturing.
Over the past five years, the industry has faced several major challenges. Weaker demand for timber inputs in downstream sawmilling and wood manufacturing industries has resulted in lower production volumes, while increasing environmental concerns and opposition to logging have reduced harvest volumes in native forests. “Plantation logs now account for the majority of timber that is harvested in the industry,” says Little. Overall, industry revenue is estimated to fall at a compound annual rate of 4.1% over the five years through 2014-15, to reach $1.5 billion. However, improving residential housing construction activity and subsequent demand for structural, architectural and decorative timber materials is expected to result in a 2.3% jump in revenue in 2014-15. The industry exhibits a low level of market share concentration. Major companies include Hancock Victorian Plantations Holdings Pty Limited.
The Logging industry is projected to exhibit sluggish growth over the next five years, although this is still an improvement on its performance over the past five years. Stronger demand for wood inputs from downstream timber processors is set to drive harvest volumes, subsequently boosting demand for logging services and industry revenue. Industry profit margins are set to rise over this period due to a rising domestic price of timber. Environmental concerns regarding sustainable forest management practices are also likely to continue to challenge industry operators over the next five years.
For more information, visit IBISWorld’s Logging industry in Australia report page.
Companies in the industry are primarily engaged in logging timber plantations and native forests, including felling, cutting and roughly hewing logs into products such as railway sleepers or posts. The industry also includes firms that are mainly engaged in cutting trees and scrubs for firewood.
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