Megatrends in Australian Timber: Part 1
This month, we are doing a five part series on megatrends in the timber industry and how they will affect sales and prices in Brisbane, now and for the foreseeable future. The first megatrend is increased demand for timber due to population growth.
More People, More Demand for Timber
Australia’s population is projected to grow to 34 million for an increase of 44% by 2050. In addition, population in the Asian region, consisting of India, Southeast Asia and China, is expected to increase to 4.9 billion by 2050.
In many basic economies, timber and timber fibre are used for housing and fuel. More advanced economies need timber for paper product, wood panels, structural elements and biochemical products. Historically, growth of domestic product per capita, combined with population growth, would expand the need for paper products to be used for communication purposes.
However, the computer age is lessening the need for paper. However, population growth still increases the demand for timber and can lead to shortages in countries that are net importers of timber.
Australia: Will We Have Enough Timber to Meet Sales Demand in the Future?
Our ability to respond to increased demand is going to be contingent upon our ability to consistently supply high quality timber products at reasonable prices. Due to our current setup, we aren’t currently poised to meet that demand.
Bottom line: it will cost between $75 billion and $400 billion over the next 30 years to plant enough trees to meet the growing demands of the industry. In addition, forestry professionals are concerned with shrinking profit margins, which tend to be as low as 4-7% on the supply end.
The demand for paper and cardboard grade timber will grow, creating a market for lower grade timber. Demand for wood panels and engineered timber products will also grow as construction demands increase.
What it Means for Timber Sales and Supply in Brisbane
As demand grows, prices are eventually going to grow. There is a good chance that timber prices may outpace inflation in the next 20-30 years. That may make it more difficult for us to find great timber for you at great prices. But we will find a way.
To learn more, call Narangba Timbers today 1300 477 024.