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Australian Fabricated Wood Manufacturing Faces Challenges Amid Rising Imports

by Giezel Garcia
03/05/2025
in Importing & Exporting

Australia’s fabricated wood manufacturing industry has experienced a decline, with revenue affected by weakening demand from downstream manufacturers and increased competition from imports, according to a report by IBISWorld.

Industry revenue has fallen at an annualised rate of 0.1% over the past five years, with total revenue expected to reach $1.7 billion in 2024-25 following a projected 1.4% decline.

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High timber costs and subdued construction activity have contributed to challenges for local manufacturers. Limited availability of plantation trees has kept timber prices elevated, restricting manufacturers’ ability to absorb rising costs.

Increasing import penetration has added competitive pressures, affecting profitability for domestic producers. The construction sector, which accounts for approximately 80% of industry revenue, has seen varying demand trends, with a slowdown in multi-unit apartment construction and rising material and labor costs.

Industry confidence has also been impacted by the collapse of major builders such as Metricon.

Particleboard, a key segment of fabricated wood manufacturing, has been particularly affected by declining apartment construction. The product’s cost-effectiveness has led to increased reliance on imports, contributing to revenue declines.

Despite these challenges, manufacturers continue to operate near high-demand regions, with the eastern seaboard remaining a focal point for industry activity.

Looking ahead, IBISWorld forecasts modest industry growth over the next five years, though supply constraints due to limited plantation tree availability may persist. Potential government initiatives aimed at supporting replantation efforts could help alleviate some pressures by increasing timber resources.

The industry’s competitive landscape is expected to remain shaped by pricing and quality considerations, with manufacturers needing to meet industry standards while addressing cost concerns among retailers and construction firms.

As economic conditions evolve, industry participants will need to adapt to shifting demand patterns and cost fluctuations. IBISWorld suggests that regulatory support and increased investment in sustainable timber resources could contribute to the sector’s long-term stability.

Explore top supply chain logistics news at The Supply Chain Report. Interested in international trade? Visit ADAMftd.com for free tools.

#AustralianManufacturing #WoodIndustry #TradeChallenges #RisingImports #LocalProduction #SupplyChainIssues #EconomicImpact

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