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Lumber sales YTD 2011

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Local building lumber sales is an important indicator of building activity. Lumber is the "lifeblood" of distribution and is present in every building project to a greater or a lesser dgree. It is …

Local building lumber sales is an important indicator of building activity. Lumber is the "lifeblood" of distribution and is present in every building project to a greater or a lesser dgree. It is timeous (published 10 days after month end) and the % Change in Cum YTD sales (in m3) can be compared with the same statistic for cement sales (in tonnes) and BPP and BC (in m2). Thus an holistic comparative view can be developed of the trends in the Building and construction industry with a MAT outlook for the year under review.

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  • 1. THE STRATEGIC FORUM www.strategicforum.co.za Studium Ad Prosperandum •• BUILDING RESEARCH BUILDING RESEARCH BMI BMI STRATEGY CONSULTING STRATEGY CONSULTING UNIT cc UNIT cc  Voluntas in Conveniendum Reg. No. 2002/105109/23 THE STRATEGIC FORUM A place of assembly for strategic conversations Towards Making sense of the Building Industry: Lumber Sales Dr. Llewellyn B. Lewis November 20111 © BMI-BRSCU
  • 2. THE INDUSTRY DASHBOARD: BPP & BC, CEMENT AND LUMBER SALES: 2010, 2009 & 2011 THE INDUSTRY DASHBOARD: DECEMBER 2011: BPP AND BC (OCT), CEMENT AND LUMBER SALES (NOV). Domestic Cement Sales (Tonnes) ended 2010 at -7,75% compared to 2009 Cumulative Y/Y January 2011 for Domestic Cement Sales recorded a decrease of -5,04% compared to 2010, followed by Cumulative Y/Y declines of -3,34% in February, -2,85% in March, -1,91% in April, -2,11% in May, +0,04% in June and +0,07% in July and + 0,69% in August, +2,08% in September, +2,95% in October and + 3,58% in November - thus a gradually improving trend. The MAT Forecast for Domestic Cement Sales shows marginal growth of + 3,34% for 2011 vs 2010. Local Building Lumber Sales (m3) ended 2010 at +7,20% compared to 2009. Cumulative Y/Y January 2011 recorded a massive increase of 34,58% compared to 2010, followed by Cumulative Y/Y growths of 19,62% in February, 17,38% in March, 12,86% in April, 12,56% in May, 15,57% in June, 15,78% in July, 14,61% in August, +17,48% in September, +15,67% in October and + 14,10% in November. It does appear as if Lumber Sales is continuing to "buck the trend" which may be the "green shoots" the building industry is looking for. The MAT Forecast for Local Building Lumber Sales (in m3) shows strong growth of + 13,22% for 2011 vs 2010. . Total Building Plans Passed (m2) ended 2010 at -11,65% compared to 2009. Cumulative Y/Y building plans passed (BPP) by larger municipalities (in m2) for YTD Oct 2011 decreased by - 2,25% compared with Oct 2010. • A decrease was reported for Additions and Alterations BPP (- 16,07%), whilst • BPP for Residential Buildings increased by + 2,60%. • The increase reported for non residential buildings BPP was + 11,19%. Longer term trends in the non- residential sector still reflect falling demand levels. The MAT Forecast for Residential BPP (in m2) shows marginal growth of + 2,23%, Non Residential BPP shows growth of + 9,48%, Additions and Alterations BPP shows decline of – 13,69% and Total BPP shows decline of – 1,92% for 2011 vs 2010.2
  • 3. THE INDUSTRY DASHBOARD: BPP & BC, CEMENT AND LUMBER SALES: 2010, 2009 & 2011 Total Buildings Completed (m2) ended 2010 at -27,87% compared to 2009. Cumulative Y/Y buildings reported as completed (BC) to larger municipalities (in m2) for YTD Oct 2011 decreased by – 7,92% compared with Oct 2010. • The largest percentage decrease in the value of buildings reported as completed (BC) was reported for Non residential BC (- 22,41%), whilst • Residential buildings recorded a decline (- 1,85%) and • Additions and Alterations decreased (- 5,12%). After these first 10 months results it is still our view that the decline in Residential Investment should decrease month on month from now on and in spite of the expected decline in Non Residential activity (about half that of Residential Building) will contribute to the positive growth in Total Investment in Building from the third quarter of 2011. The MAT Forecast for Residential BC shows marginal decline of – 1,51%, Non Residential BC shows DECLINE of – 19,56%, Additions and Alterations BC shows a DECLINE of -4,34% and Total BC shows DECLINE of – 6,62% for 2011 vs 2010. From the foregoing comparisons it can be seen that ALL the indicators indicate a turning point and MAT Forecasts indicating gradual growth (less negative). It still remains to be seen whether the gradual improvement in BPP and BC from the levels achieved in 2010 will be encouraged by the increasing willingness of the Banks to relax their stringent lending criteria so that Mortgage Advances can flow into the industry. At this stage it is mainly first time homebuyers in the middle income sector that are benefiting.3
  • 4. THE INDUSTRY DASHBOARD: BPP & BC, CEMENT AND LUMBER SALES: 2010, 2009 & 2011 Cumulative YTD Buildings Completed (BC), Domestic Cement Sales and Local Building Lumber Sales: % Change by Sector: January - Dec 2011 (Source: StatsSA; BMI-BRSCU Workings) 40% MAT FORECAST 30% 20% 10% Percentage 0% -10% -20% -30% -40% Jan- Feb Mar Apr- May Jun- Jul- Aug Sep Oct- Nov Dec 11 -11 -11 11 -11 11 11 -11 -11 11 -11 -11 Total Res BC Cum YTD % Change (m2) -13.68% -9.13% 3.09% -0.18% -7.48% -3.69% -5.13% -6.44% -3.19% -2.16% -1.94% -1.78% Total Non Res BC Cum YTD % Change (m2) -27.22% -3.67% -10.82% -9.64% -13.66% -8.22% -17.75% -19.86% -18.45% -19.69% -18.06% -16.91% Total BC Cum YTD % Change (m2) -17.93% -7.58% -1.42% -3.25% -9.44% -5.12% -9.29% -10.79% -8.08% -7.92% -7.16% -6.62% Domestic Cement Sales (Tonnes) -5.04% -3.34% -2.85% -1.91% -2.11% 0.04% -0.02% 0.61% 2.08% 2.95% 3.58% 3.34% Local Building Lumber Sales (m3) 34.58% 19.62% 17.38% 12.86% 12.56% 15.57% 15.78% 14.61% 17.48% 15.67% 14.10% 13.22%4
  • 5. CURRENT REALITY OF MAJOR BUILDING PRODUCTS BY PRODUCT: 2009 The market for major Building Product Groups by value: 2009 (Source: BMI-BRSCU) 0% 2% 4% 6% 8% 10% 12% 14% 16% Roofing and Vertical Cladding 4.40% Ceilings and Partitioning 1.26% Walling 7.28% Paving 1.35% Wall Tiles 1.36% Flooring 6.27% Cement 12.84% Aggregate and Sand 6.43% Reinforcing Steel and Sections 13.42% Sanware 3.01% Taps, Mixers and Fittings 2.61% Plumbing Pipes and Fittings 1.56% Pipes and Fittings 10.16% Geysers 1.90% Glass and Mirrors 1.98% Doors 1.17% Total value of major Building Product Garage Doors 0.33% Groups = R103,4 Billion in 2009. Frames 2.85% Major Building Product Groups account Roof Trusses 2.95% for 52,32% of Total Building and Construction Materials and 31,4% of TotalWindowsills, Fasciaboards and Bargeboards 0.87% Investment in Building and Construction. Rainwater Goods 0.25% Decorative Paint 6.46% Flatboard (PB, MDF, Other)** 8.27% Insulation 1.01%5 © BMI-BRSCU
  • 6. THE MARKET FOR ROOF TRUSSES BY SECTOR AND SEGMENT: 2009 2009 DEMAND AND MARKET SHARE FOR ROOF TRUSSES BY TYPE OF BUILDING AND MATERIAL Bldng Ind RT Bldng Ind RT Timber RT PRIVATE RESIDENTIAL m2*1000 Units*1000 R Millions R Millions % m3*1000 - Dwelling Houses < 80m2 1,377 263 2,776 116 4.19% 25.41 - Dwelling houses > 80m2 4,112 883 16,757 394 2.35% 74.90 - Townhouses and Flats 1,862 400 8,015 179 2.23% 33.91 - Other (Including Hotels) 254 51 1,204 23 1.89% 4.62 - Additions and Alterations 3,187 610 12,328 278 2.26% 36.36 Sub-total 10,791 2,207 41,081 990 2.41% 175.19 PUBLIC RESIDENTIAL - Affordable Housing 6,856 1,147 13,829 507 3.66% 110.75 - Public Authorities 2,191 367 4,419 162 3.66% 35.39 - Public Corporations 5 1 11 0 3.66% 0.08 Sub-total 9,052 1,515 18,259 669 3.66% 146.23 - Unrecorded Res Additions and Alterations (EQ UNITS) 6,587 1,261 25,478 539 2.12% 101.66 TOTAL RESIDENTIAL 26,429 4,983 84,818 2,198 2.59% 423.08 BUILDING TYPE : NON RESIDENTIAL - Offices 1,526 191 7,993 89 1.12% 27.80 - Shops (Commercial) 1,728 148 8,682 72 0.82% 29.81 - Industrial 2,737 343 8,949 172 1.92% 36.73 - Other (Including Casinos) 520 65 2,256 33 1.45% 8.97 - Recorded Additions and Alterations 1,979 248 10,364 120 1.15% 34.15 TOTAL PRIVATE NON RESIDENTIAL SEGMENT 8,490 996 38,245 485 1.27% 137.46 - Unrecorded Non Res Additions and Alterations 2,855 250 11,044 121 1.09% 34.49 TOTAL PUBLIC NON RESIDENTIAL SEGMENT 4,121 516 17,880 246 1.38% 67.16 TOTAL NON RESIDENTIAL SECTOR 15,466 1,763 67,170 852 1.27% 239.11 TOTAL RESIDENTIAL AND NON RES SECTORS 41,895 6,746 151,988 3,050 2.01% 662.196 © BMI-BRSCU
  • 7. THE MARKET FOR ROOF TRUSSES BY SECTOR AND SEGMENT: 2009 PRIVATE RESIDENTIAL THE MARKET FOR TIMBER ROOF TRUSSES - Dwelling Houses < 80m2 BY SECTOR AND SEGMENT: 2009 (UNITS*1000) - Dwelling houses > 80m2 (Source: StatsSA, SARB, MFA, BMI-BRSCU Workings) - Townhouses and Flats - Other (Including Hotels) - Additions and Alterations Sub-total PUBLIC RESIDENTIAL - Affordable Housing - Public Authorities - Public Corporations Sub-total- Unrecorded Res Additions and Alterations (EQ UNITS) TOTAL RESIDENTIAL BUILDING TYPE : NON RESIDENTIAL - Offices - Shops (Commercial) - Industrial - Other (Including Casinos) - Recorded Additions and Alterations TOTAL PRIVATE NON RESIDENTIAL SEGMENT - Unrecorded Non Res Additions and Alterations TOTAL PUBLIC NON RESIDENTIAL SEGMENT TOTAL NON RESIDENTIAL SECTOR 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,0007 © BMI-BRSCU
  • 8. THE MARKET FOR ROOF TRUSSES BY SECTOR AND SEGMENT: 2009 0 PRIVATE RESIDENTIAL 0 THE MARKET FOR TIMBER ROOF TRUSSES - Dwelling Houses < 80m2 25 BY SECTOR AND SEGMENT: 2009 (M3*1000) TOTAL = 662 000 M3 - Dwelling houses > 80m2 75 (Source: StatsSA, SARB, MFA, BMI-BRSCU Workings) - Townhouses and Flats 34 - Other (Including Hotels) 5 - Additions and Alterations 36 Sub-total 175 PUBLIC RESIDENTIAL - Affordable Housing 111 - Public Authorities 35 - Public Corporations 0 Sub-total 146- Unrecorded Res Additions and Alterations (EQ UNITS) 102 TOTAL RESIDENTIAL 423 BUILDING TYPE : NON RESIDENTIAL - Offices 28 - Shops (Commercial) 30 - Industrial 37 - Other (Including Casinos) 9 - Recorded Additions and Alterations 34 TOTAL PRIVATE NON RESIDENTIAL SEGMENT 137 - Unrecorded Non Res Additions and Alterations 34 TOTAL PUBLIC NON RESIDENTIAL SEGMENT 67 TOTAL NON RESIDENTIAL SECTOR 239 0 50 100 150 200 250 300 350 400 4508 © BMI-BRSCU
  • 9. THE MARKET FOR ROOF TRUSSES BY SECTOR, SEGMENT AND PROVINCE: 2009 ESTIMATED DEMAND AND MARKET SHARE FOR ROOF TRUSSES BY TYPE OF BUILDING AND PROVINCE: 2009: M3*1000 PRIVATE RESIDENTIAL WC EC Gauteng KZN Mpum NC FS Limp NW Total - Dwelling Houses < 80m2 5 3 9 3 1 0 2 1 2 25 - Dwelling houses > 80m2 23 4 30 8 3 1 2 1 3 75 - Townhouses and Flats 8 1 16 6 1 0 1 0 1 34 - Other (Including Hotels) 2 0 1 1 0 0 0 0 0 5 - Additions and Alterations 13 3 9 7 1 1 1 0 1 36 Sub-total 50 10 66 24 7 2 6 3 7 175 PUBLIC RESIDENTIAL - Affordable Housing 15 6 40 15 7 4 6 8 9 111 - Public Authorities 5 2 13 5 2 1 2 3 3 35 - Public Corporations 0 0 0 0 0 0 0 0 0 0 Sub-total 20 7 53 20 10 5 7 11 12 146 - Unrecorded Res Additions and Alterations 32 9 25 22 2 1 5 1 3 102 TOTAL RESIDENTIAL 102 27 145 66 18 8 19 15 22 423 BUILDING TYPE : NON RESIDENTIAL - Offices 6 1 15 3 1 0 1 0 0 28 - Shops (Commercial) 5 2 10 6 2 0 1 1 2 30 - Industrial 11 2 12 9 1 0 1 0 1 37 - Other (Including Casinos) 3 0 3 1 0 0 0 0 0 9 - Recorded Additions and Alterations 11 3 9 7 1 0 2 0 1 34 TOTAL PRIVATE NON RES SEGMENT 36 9 49 27 5 1 5 2 4 137 - Unrecorded Non Res Additions and Alterations 11 3 9 8 1 0 2 0 1 34 TOTAL PUBLIC NON RES SEGMENT 17 3 26 12 3 1 2 1 2 67 TOTAL NON RESIDENTIAL SECTOR 64 15 84 47 8 3 8 3 8 239 TOTAL RES AND NON RES SECTORS 167 43 228 113 26 11 27 18 30 6629 © BMI-BRSCU
  • 10. CURRENT REALITY OF MAJOR BUILDING PRODUCTS BY PRODUCT: 2009 ESTIMATED DEMAND AND MARKET SHARE FOR ROOF TRUSSES BY TYPE OF BUILDING AND PROVINCE: 2009: M3*1000 (Source: StatsSA, BMI-BRSCU Workings) 250 200 150 M3*1000 100 50 0 WC EC Gauteng KZN Mpum NC FS Limp NW Demand and Market Share of Roof Trusses by 167 43 228 113 26 11 27 18 30 Province: m3*100010 © BMI-BRSCU
  • 11. CURRENT REALITY OF THE LUMBER MARKET: 2001 – 2011 (November) Lumber Sales by End-use: January 2001 - November 2011 (m3) (Source: Crickmay & Associates, BMI-BRSCU Workings) 200,000 180,000 160,000 140,000 120,000Cubic Metres 100,000 80,000 60,000 40,000 20,000 - May 03 May 05 May 07 May 09 May 10 May 01 May 02 May 04 May 06 May 08 May 11 Sep 03 Sep 04 Sep 05 Sep 08 Sep 10 Jan 01 Sep 01 Sep 02 Jan 03 Jan 06 Sep 06 Jan 07 Sep 07 Jan 08 Sep 09 Sep 11 Jan 02 Jan 04 Jan 05 Jan 09 Jan 10 Jan 11 Local Building Local Furniture Local Packaging & Other Overseas Export TOTAL 12 per. Mov. Avg. (Local Building) 12 per. Mov. Avg. (TOTAL)11 © BMI-BRSCU
  • 12. CURRENT REALITY OF THE LUMBER MARKET: 2001- MAT (NOVEMBER) 2011 Lumber Sales by End-use: 2001 - MAT* November 2011: Cubic Metres (Source: Crickmay & Associates, BMI-BRSCU Workings) 2,000,000 1,800,000 1,600,000 1,400,000 Cubic Metres 1,200,000 1,000,000 800,000 600,000 400,000 200,000 - 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 MAT 2011 Overseas Export 115,349 238,159 163,088 104,013 48,387 29,940 15,822 8,439 5,303 5,995 3,995 Packaging & Other 242,878 278,066 250,003 263,842 310,282 297,990 292,108 226,276 169,006 163,485 198,230 Re-manufacturing 352,020 501,267 398,789 427,826 433,190 332,829 302,934 255,647 222,954 274,519 212,537 Local Building 477,837 525,727 813,183 1,013,57 1,149,59 1,122,60 1,128,01 1,108,16 903,458 968,525 1,096,6012 © BMI-BRSCU
  • 13. CURRENT REALITY OF THE LUMBER MARKET: 201013 © BMI-BRSCU
  • 14. CURRENT REALITY OF THE LUMBER MARKET: 2001–2011 (NOVEMBER) Lumber Sales by End-use: January 2001 - Nov 2011 (m3) (Source: Crickmay & Associates, BMI-BRSCU Workings) 200 000 180 000 160 000 140 000 120 000Cubic Metres 100 000 80 000 60 000 40 000 20 000 - May 01 May 02 May 03 May 04 May 05 May 06 May 07 May 08 May 09 May 10 May 11 Sep 10 Sep 01 Sep 02 Sep 03 Sep 04 Sep 05 Sep 06 Sep 07 Sep 08 Sep 09 Sep 11 Jan 07 Jan 01 Jan 02 Jan 03 Jan 04 Jan 05 Jan 06 Jan 08 Jan 09 Jan 10 Jan 11 Overseas Export Local Packaging & Other Local Furniture Local Building14 © BMI-BRSCU
  • 15. THE LOCAL BUILDING LUMBER MARKET: 2001 – 2010 (NOVEMBER) Lumber Sales by End-use: Local Building: January 2001 - November 2011 (m3) (Source: Crickmay & Associates, BMI-BRSCU Workings) 120 000 100 000 80 000Cubic Metres 60 000 40 000 20 000 - May 01 May 02 May 03 May 04 May 05 May 06 May 07 May 08 May 09 May 10 May 11 Jan 01 Jan 02 Jan 03 Jan 04 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Sep 01 Sep 02 Sep 03 Sep 04 Sep 05 Sep 06 Sep 07 Sep 08 Sep 09 Sep 10 Sep 11 Local Building 12 per. Mov. Avg. (Local Building)15 © BMI-BRSCU
  • 16. THE LOCAL BUILDING MARKET: CUM Y/Y 2010 VS 2009 (Jan - December) Lumber Sales by End-use: Local Building: Cum Y/Y 2010 vs 2009 (Source: Crickmay & Associates, BMI-BRSCU Workings) 1,200,000 14% 12% 1,000,000 10% 800,000Cubic Metres 8% 600,000 6% 400,000 4% 200,000 2% - 0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2009 Cum Y/Y Local Building 58,678 138,636 207,325 270,561 343,281 415,102 500,613 581,890 660,911 753,746 854,865 903,458 2010 Cum Y/Y Local Building 62,111 145,627 226,328 306,350 389,026 464,887 542,714 636,696 712,769 807,356 908,249 968,525 % Change Cum Y/Y Local Building: 2010 vs 2009 5.85% 5.04% 9.17% 13.23% 13.33% 11.99% 8.41% 9.42% 7.85% 7.11% 6.24% 7.20%16 © BMI-BRSCU
  • 17. THE LOCAL BUILDING MARKET: CUM Y/Y 2011 VS 2010 (NOVEMBER) Lumber Sales by End-use: Local Building: Cum Y/Y November 2011 vs 2010 (Source: Crickmay & Associates, BMI-BRSCU Workings) 1 200 000 40% MAT FORECAST % Change Cum Y/Y Local Building: 2011 vs 2010 35% 1 000 000 30% 800 000 Cubic Metres 25% 600 000 20% 15% 400 000 10% 200 000 5% - 0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 Cum Y/Y Local Building 62 111 145 627 226 328 306 350 389 026 464 887 542 714 636 696 712 769 807 356 908 249 968 525 2011 Cum Y/Y Local Building 83 590 174 204 265 674 345 749 437 896 537 281 628 339 729 731 837 356 933 839 1 036 3 1 096 6 % Change Cum Y/Y Local Building: 2011 vs 2010 34.58% 19.62% 17.38% 12.86% 12.56% 15.57% 15.78% 14.61% 17.48% 15.67% 14.10% 13.22%17 © BMI-BRSCU
  • 18. THE LOCAL FURNITURE LUMBER MARKET: 2001 – 2011 (NOVEMBER) Lumber Sales by End-use: Local Furniture: January 2001 - November 2011 (m3) (Source: Crickmay & Associates, BMI-BRSCU Workings) 60 000 50 000 40 000Cubic Metres 30 000 20 000 10 000 - Sep 01 Sep 02 Sep 03 Sep 04 Sep 05 Sep 06 Sep 07 Sep 08 Sep 09 Sep 10 Sep 11 Jan 01 May 01 Jan 02 May 02 Jan 03 May 03 Jan 04 May 04 Jan 05 May 05 Jan 06 May 06 Jan 07 May 07 Jan 08 May 08 Jan 09 May 09 Jan 10 May 10 Jan 11 May 11 Local Furniture 12 per. Mov. Avg. (Local Furniture)18 © BMI-BRSCU
  • 19. THE LOCAL FURNITURE MARKET: CUM Y/Y 2010 vs 2009 (Jan- December) Lumber Sales by End-use: Local Furniture: Cum Y/Y 2010 vs 2009 (Source: Crickmay & Associates, BMI-BRSCU Workings) 300,000 70% 60% 250,000 50% 200,000Cubic Metres 40% 150,000 30% 100,000 20% 50,000 10% - 0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2009 Cum Y/Y Local Furniture 11,762 34,092 54,712 69,850 89,633 108,929 133,856 150,668 168,876 189,953 212,128 222,954 2010 Cum Y/Y Local Furniture 19,154 46,610 76,639 99,561 122,215 142,138 173,714 196,548 215,853 236,106 259,558 274,519 % Change Cum Y/Y: Local Furniture: 2010 vs 62.85% 36.72% 40.08% 42.54% 36.35% 30.49% 29.78% 30.45% 27.82% 24.30% 22.36% 23.13% 200919 © BMI-BRSCU
  • 20. THE LOCAL FURNITURE MARKET: CUM Y/Y 2011 vs 2010 (NOVEMBER) Lumber Sales by End-use: Local Furniture: Cum Y/Y November 2011 vs 2010 (Source: Crickmay & Associates, BMI-BRSCU Workings) 300 000 5% MAT FORECAST % Change Cum Y/Y Local Furniture: 2011 vs 2010 0% 250 000 -5% 200 000 Cubic Metres -10% 150 000 -15% 100 000 -20% 50 000 -25% - -30% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 Cum Y/Y Local Furniture 19 154 46 610 76 639 99 561 122 215 142 138 173 714 196 548 215 853 236 106 259 558 274 519 2011 Cum Y/Y Local Furniture 20 061 42 300 60 613 75 760 92 097 110 302 125 289 142 265 161 214 178 319 197 576 212 537 % Change Cum Y/Y: Local Furniture: 2011 vs 2010 4.74% -9.25% -20.91% -23.91% -24.64% -22.40% -27.88% -27.62% -25.31% -24.48% -23.88% -22.58%20 © BMI-BRSCU
  • 21. THE LOCAL PACKAGING MARKET: 2001 – 2011 (OCTOBER) Lumber Sales by End-use: Local Packaging & Other: January 2001 - November 2011 (m3) (Source: Crickmay & Associates, BMI-BRSCU Workings) 40 000 35 000 30 000 25 000Cubic Metres 20 000 15 000 10 000 5 000 - May 01 May 02 May 03 May 04 May 05 May 06 May 07 May 08 May 09 May 10 May 11 Jan 01 Jan 02 Jan 03 Sep 03 Jan 04 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Sep 10 Jan 11 Sep 01 Sep 02 Sep 04 Sep 05 Sep 06 Sep 07 Sep 08 Sep 09 Sep 11 Local Packaging & Other 12 per. Mov. Avg. (Local Packaging & Other)21 © BMI-BRSCU
  • 22. THE LOCAL PACKAGING MARKET: Y/Y 2010 VS 2009 (January - December) Lumber Sales by End-use: Local Packaging & Other: Cum Y/Y 2010 vs 2009 (Source: Crickmay & Associates, BMI-BRSCU Workings) 180,000 50% 160,000 40% 140,000 120,000 30%Cubic Metres 100,000 20% 80,000 60,000 10% 40,000 0% 20,000 - -10% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2009 Cum Y/Y Local Packaging & Other 8,684 23,926 37,438 49,778 65,384 80,604 96,092 109,650 126,348 144,142 161,618 169,006 2010 Cum Y/Y Local Packaging & Other 12,524 28,619 45,364 59,737 72,860 84,862 98,885 112,202 122,943 139,629 154,994 163,485 % Change Cum Y/Y: Local Packaging & Other: 44.22% 19.61% 21.17% 20.01% 11.43% 5.28% 2.91% 2.33% -2.69% -3.13% -4.10% -3.27% 2010 vs 200922 © BMI-BRSCU
  • 23. THE LOCAL PACKAGING MARKET: Y/Y 2011 VS 2010 (NOVEMBER) Lumber Sales by End-use: Local Packaging & Other: Cum Y/Y 2010 vs 2009 (Source: Crickmay & Associates, BMI-BRSCU Workings) 180 000 50% % Change Cum Y/Y Local Packaging & Other: 2010 vs 2009 160 000 40% 140 000 120 000 30% Cubic Metres 100 000 20% 80 000 60 000 10% 40 000 0% 20 000 - -10% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2009 Cum Y/Y Local Packaging & Other 8 684 23 926 37 438 49 778 65 384 80 604 96 092 109 650 126 348 144 142 161 618 169 006 2010 Cum Y/Y Local Packaging & Other 12 524 28 619 45 364 59 737 72 860 84 862 98 885 112 202 122 943 139 629 154 994 163 485 % Change Cum Y/Y: Local Packaging & Other: 44.22% 19.61% 21.17% 20.01% 11.43% 5.28% 2.91% 2.33% -2.69% -3.13% -4.10% -3.27% 2010 vs 200923 © BMI-BRSCU
  • 24. THE OVERSEAS EXPORT MARKET: 2001 – 2011 (NOVEMBER) Lumber Sales by End-use: Local Packaging & Other: Cum Y/Y 2010 vs 2009 (Source: Crickmay & Associates, BMI-BRSCU Workings) 180 000 50% % Change Cum Y/Y Local Packaging & Other: 2010 vs 2009 160 000 40% 140 000 120 000 30% Cubic Metres 100 000 20% 80 000 60 000 10% 40 000 0% 20 000 - -10% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2009 Cum Y/Y Local Packaging & Other 8 684 23 926 37 438 49 778 65 384 80 604 96 092 109 650 126 348 144 142 161 618 169 006 2010 Cum Y/Y Local Packaging & Other 12 524 28 619 45 364 59 737 72 860 84 862 98 885 112 202 122 943 139 629 154 994 163 485 % Change Cum Y/Y: Local Packaging & Other: 44.22% 19.61% 21.17% 20.01% 11.43% 5.28% 2.91% 2.33% -2.69% -3.13% -4.10% -3.27% 2010 vs 200924 © BMI-BRSCU
  • 25. THE OVERSEAS EXPORT MARKET: CUM Y/Y 2010 VS 2009 (January - December) Lumber Sales by End-use: Overseas Export: Cum Y/Y 2010 vs 2009 (Source: Crickmay & Associates, BMI-BRSCU Workings) 7,000 40% 6,000 30% 5,000 20%Cubic Metres 4,000 10% 3,000 0% 2,000 -10% 1,000 - -20% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2009 Cum Y/Y Overseas Export 1,442 1,980 2,017 2,419 2,618 3,196 3,351 3,822 4,186 4,870 5,303 5,303 2010 Cum Y/Y Overseas Export 1,234 1,619 2,633 2,952 3,070 3,513 3,911 4,585 4,879 5,160 5,885 5,995 % Change Cum Y/Y: Overseas Export: 2010 vs -14.42% -18.23% 30.54% 22.03% 17.27% 9.92% 16.71% 19.96% 16.56% 5.95% 10.97% 13.05% 200925 © BMI-BRSCU
  • 26. THE OVERSEAS EXPORT MARKET: CUM Y/Y 2011 VS 2010 (NOVEMBER) Lumber Sales by End-use: Overseas Export: Cum Y/Y November 2011 vs 2010 (Source: Crickmay & Associates, BMI-BRSCU Workings) 7 000 -20% -25% % Change Cum Y/Y Overseas Export: 2011 vs 2010 6 000 -30% -35% -40% 5 000 -45% Cubic Metres -50% 4 000 -55% -60% 3 000 -65% -70% 2 000 MAT FORECAST -75% -80% 1 000 -85% -90% - -95% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 Cum Y/Y Overseas Export 1 234 1 619 2 633 2 952 3 070 3 513 3 911 4 585 4 879 5 160 5 885 5 995 2011 Cum Y/Y Overseas Export 81 500 610 1 097 1 491 1 817 2 571 3 037 3 352 3 721 3 885 3 995 % Change Cum Y/Y: Overseas Export: 2010 vs 2009 -93.44% -69.12% -76.83% -62.84% -51.43% -48.28% -34.26% -33.76% -31.30% -27.89% -33.98% -33.36%26 © BMI-BRSCU
  • 27. THE TOTAL LUMBER MARKET: 2001 – 2011 (NOVEMBER) Lumber Sales by End-use: Total: January 2001 - November 2011 (m3) (Source: Crickmay & Associates, BMI-BRSCU Workings) 200 000 180 000 160 000Cubic Metres 140 000 120 000 100 000 80 000 60 000 May 01 May 02 May 03 May 04 May 05 May 06 May 07 May 08 May 09 May 10 May 11 Jan 01 Jan 02 Jan 03 Jan 04 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Sep 01 Sep 02 Sep 03 Sep 04 Sep 05 Sep 06 Sep 07 Sep 08 Sep 09 Sep 10 Sep 11 TOTAL 12 per. Mov. Avg. (TOTAL)27 © BMI-BRSCU
  • 28. THE TOTAL LUMBER MARKET: CUM Y/Y 2010 VS 2009 (January - December) Lumber Sales by End-use: Total: Cum Y/Y 2010 vs 2009 (Source: Crickmay & Associates, BMI-BRSCU Workings) 1,600,000 25% 1,400,000 20% 1,200,000 1,000,000 15%Cubic Metres 800,000 10% 600,000 400,000 5% 200,000 - 0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2009 Cum Y/Y Total 80,566 198,634 301,492 392,608 500,916 607,831 733,912 846,030 960,321 1,092,7 1,233,9 1,300,7 2010 Cum Y/Y Total 95,023 222,475 350,964 468,600 587,171 695,400 819,224 950,031 1,056,4 1,188,2 1,328,6 1,412,5 % Change Cum Y/Y: Total: 2010 vs 2009 17.94% 12.00% 16.41% 19.36% 17.22% 14.41% 11.62% 12.29% 10.01% 8.74% 7.68% 8.60%28 © BMI-BRSCU
  • 29. THE TOTAL LUMBER MARKET: CUM Y/Y 2011 VS 2010 (NOVEMBER) Total Lumber Sales: Cum Y/Y November 2011 vs 2010 (Source: Crickmay & Associates, BMI-BRSCU Workings) 1 600 000 25% MAT FORECAST 24% 23% 1 400 000 22% 21% % Change Cum Y/Y Total: 2011 vs 2010 20% 1 200 000 19% 18% 17% 1 000 000 Cubic Metres 16% 15% 14% 800 000 13% 12% 11% 600 000 10% 9% 400 000 8% 7% 6% 200 000 5% 4% 3% - 2% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 Cum Y/Y Total 95 023 222 475 350 964 468 600 587 171 695 400 819 224 950 031 1 056 4 1 188 2 1 328 6 1 412 5 2011 Cum Y/Y Total 117 538 246 408 372 829 482 730 607 358 741 381 864 158 1 001 2 1 148 9 1 283 8 1 427 5 1 511 3 % Change Cum Y/Y: Total: 2011 vs 2010 23.69% 10.76% 6.23% 3.02% 3.44% 6.61% 5.48% 5.40% 8.75% 8.04% 7.44% 7.00%29 © BMI-BRSCU
  • 30. THE LUMBER MARKET BY REGION: CUM Y/Y 2010 VS 2009 YTD Formal Softwood Sawmill Lumber Sales by Region (m3): 2010 (Source: Crickmay Associates, BMI-BRSCU Workings) 450,000 35% 400,000 30% 350,000 25% 300,000 250,000 20%Cubic Metres 200,000 15% 150,000 10% 100,000 5% 50,000 0 0% Nam & Mpum, WC, SC , Gau KZN EC FS & Les Neighb O/S Export Limp, NW NC Territory YTD Formal Softwood Sawmill Lumber Sales 419,950 232,807 236,797 297,030 106,782 47,445 65,718 5,995 by Region (m3) Percentage 29.73% 16.48% 16.76% 21.03% 7.56% 3.36% 4.65% 0.42%30 © BMI-BRSCU
  • 31. THE LUMBER MARKET BY REGION: CUM Y/Y 2011 VS 2010 (NOVEMBER) Cum YTD Formal Softwood Sawmill Lumber Sales by Region (m3): 2011 (November) (Source: Crickmay Associates, BMI-BRSCU Workings) 500 000 35% 450 000 30% 400 000 350 000 25% 300 000 20% 250 000 15% 200 000 150 000 10% 100 000 5% 50 000 0 0% Nam & Mpum, WC, SC , Gau KZN EC FS & Les Neighb O/S Export Limp, NW NC TerritoryPercentage 31.60% 18.24% 15.97% 19.23% 7.26% 2.93% 4.50% 0.27%YTD Formal Softwood Sawmill Lumber Sales by Region 451 047 260 395 227 913 274 499 103 709 41 874 64 209 3 885 (m3)31 © BMI-BRSCU
  • 32. LOCAL BUILDING MARKET VS RESIDENTIAL BC: 2002 – 2011 (NOVEMBER) Cum Y/Y % Change: Local Building Lumber Sales (m3) vs Residential BC (m2): Jan 2002 - November 2011 (Source: StatsSA; Crickmay Associates; BMI-BRSCU Workings)70% The revival in Lumber sales to Local Building50% HAS GROWN STRONGLY but is now flattening off.30%10%-10%-30%-50% Apr 02 Oct 08 Jan 02 Oct 02 Apr 03 Jan 03 Oct 03 Apr 04 Jan 04 Oct 04 Apr 05 Jan 05 Oct 05 Apr 06 Apr 07 Apr 08 Apr 09 Apr 10 Oct 10 Apr 11 Jan 06 Oct 06 Jan 07 Oct 07 Jan 08 Jan 09 Oct 09 Jan 10 Jan 11 Oct 11 Jul 02 Jul 03 Jul 04 Jul 05 Jul 06 Jul 07 Jul 08 Jul 09 Jul 10 Jul 11 Cum Y/Y % Change: Local Building Lumber Sales Cum Y/Y % Change: Total Residential BC (m2) 12 per. Mov. Avg. (Cum Y/Y % Change: Local Building Lumber Sales) 12 per. Mov. Avg. (Cum Y/Y % Change: Total Residential BC (m2))32 © BMI-BRSCU
  • 33. LOCAL BUILDING MARKET VS TOTAL BC: 2002 – 2011 (NOVEMBER) Cum Y/Y % Change: Local Building Lumber Sales (m3) vs Total BC (m2): January 2002 - Nov 2011 (Source: StatsSA; Crickmay Associates, BMI-BRSCU Workings)70%50%30%10%-10%-30%-50% Jul 11 Jul 02 Jul 03 Jul 04 Jul 05 Jul 06 Jul 07 Jul 08 Jul 09 Jul 10 Jan 02 Apr 02 Jan 03 Jan 04 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Apr 09 Jan 10 Jan 11 Oct 02 Apr 03 Oct 03 Apr 04 Oct 04 Apr 05 Oct 05 Apr 06 Oct 06 Apr 07 Oct 07 Apr 08 Oct 08 Oct 09 Apr 10 Oct 10 Apr 11 Oct 11 Cum Y/Y % Change: Local Building Lumber Sales Cum Y/Y % Change: Total BC (m2) 12 per. Mov. Avg. (Cum Y/Y % Change: Local Building Lumber Sales) 12 per. Mov. Avg. (Cum Y/Y % Change: Total BC (m2))33 © BMI-BRSCU
  • 34. LOCAL BUILDING MARKET VS RESIDENTIAL BPP: 2002 – 2011 (NOVEMBER) Cum Y/Y % Change: Local Building Lumber Sales (m3) vs Res BPP (m2) : Jan 2002 - November 2011 (Source: StatsSA; Crickmay Associates, BMI-BRSCU Workings)70%50% Local Building Lumber Sales appear to be more closely correlated to Residential BPP than to BC and also leads the revival? Related to Merchant anticipation of revival30% and stock build-up in anticipation?10%-10%-30%-50% Apr 02 Jan 02 Oct 02 Apr 03 Jan 03 Oct 03 Apr 04 Jan 04 Oct 04 Apr 05 Apr 06 Apr 07 Apr 08 Oct 08 Apr 09 Apr 10 Oct 10 Apr 11 Jan 05 Oct 05 Jan 06 Oct 06 Jan 07 Oct 07 Jan 08 Jan 09 Oct 09 Jan 10 Jan 11 Oct 11 Jul 02 Jul 03 Jul 04 Jul 05 Jul 06 Jul 07 Jul 08 Jul 09 Jul 10 Jul 11 Cum Y/Y % Change: Lumber Sales Cum Y/Y % Change: Total Residential BPP (m2) 12 per. Mov. Avg. (Cum Y/Y % Change: Lumber Sales) 12 per. Mov. Avg. (Cum Y/Y % Change: Total Residential BPP (m2))34 © BMI-BRSCU
  • 35. LOCAL BUILDING MARKET VS TOTAL BPP: 2002 – 2011 (NOVEMBER) Cum Y/Y % Change: Local Building Lumber Sales (m3) vs Total BPP (m2) : January 2002 - November 2011 (Source: Crickmay Associates, BMI-BRSCU Workings)70%50% Local Building Lumber Sales appear to be more closely correlated to Total BPP than to BC and also leads the revival?30%10%-10%-30%-50% Oct 08 Oct 10 Apr 02 Oct 02 Apr 03 Oct 03 Apr 04 Oct 04 Apr 05 Oct 05 Apr 06 Oct 06 Apr 07 Oct 07 Apr 08 Apr 09 Oct 09 Apr 10 Apr 11 Oct 11 Jan 02 Jan 03 Jan 04 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jul 02 Jul 03 Jul 04 Jul 05 Jul 06 Jul 07 Jul 08 Jul 09 Jul 10 Jul 11 Cum Y/Y % Change: Local Building Lumber Sales Cum Y/Y % Change: Total BPP (m2) 12 per. Mov. Avg. (Cum Y/Y % Change: Local Building Lumber Sales) 12 per. Mov. Avg. (Cum Y/Y % Change: Total BPP (m2))35 © BMI-BRSCU
  • 36. 36 90 100 110 120 130 140 150 160 170 180 190 200 210 220 230 240 250 260 270 280 290 300 310 320 January Februar March April May June July 2002 August Septem October Novem Decem January Februar March April May June July 2003 August Septem Bricks - Stock October Novem Cement (Retail) Decem January Februar March April Cement building blocks May June July 2004 August Septem Ordinary and extended cement October January 2000 = 100 Novem SA Pine Kiln Dried Decem January Februar March April Building construction : Building industries May June July 2005 August Septem October Novem Decem January Februar March April May June July 2006 August Septem October Novem Decem January (JULY) Februar March April May 2007 June Cement July August Septem October Novem Decem CPI January (Source: StatsSA; BMI-BRSCU Workings) Sand Februar March April Ordinary and Extended May 2008 June July Bricks - Face August Septem October SA Pine, kiln dried Novem Decem January Februar March April May June July 2009 August Septem October Novem Decem January Februar Aggregated crushed stone (as from 2/86) March PRODUCER PRICE INDEX (PPI) OF SELECTED BUILDING MATERIALS: JANUARY 2002- JULY 2011 April May PPI OF SELECTED BUILDING MATERIALS: 2002 – 2011 June CPI July 2010 August Septem October Novem Decem January Februar March April May 2011 June July© BMI-BRSCU
  • 37. 37 90 100 110 120 130 140 150 160 170 180 190 200 210 220 230 240 250 260 270 280 290 300 310 320 January Februar March April May June July 2002 August Septem October Novem Decem January Februar March April May June July 2003 August Septem October Bricks - Stock Novem January 2000 = 100 Decem January SA Pine Kiln Dried Februar March April May June July 2004 August Septem October Ordinary and extended cement Novem Decem January Februar March April May SA Pine Kiln Dried June July 2005 August Septem October Novem Decem January Februar March April May June July 2006 August Septem October Novem (JULY) Decem January Februar March April 2007 May June July August Septem October Novem Decem January CPI Februar (Source: StatsSA; BMI-BRSCU Workings) March April May 2008 June July August Septem October Novem Decem January Februar March April May June July 2009 August Septem October Novem Decem January Februar Building construction : Building industries March PPI OF SELECTED BUILDING MATERIALS: 2002 – 2011 April PRODUCER PRICE INDEX (PPI) OF SELECTED BUILDING MATERIALS: JAN 2002- JULY 2011 May June July 2010 August Septem October Novem CPI Decem January Februar March April May 2011 June© BMI-BRSCU July
  • 38. Index (2000 = 100)38 SA Pi ne , ki ln 100 110 120 130 140 150 160 170 180 190 200 210 220 230 240 250 260 270 280 290 300 310 dr Ag ie gr Br Pa d eg C ic ks in at em ts ed en Bri - St cr t b cks oc u ui k O she ld - F G rd in d in ac g la ar sto bl e ss y SA Pine ne oc ,f ks or Na and (a bu tur ex s fr Sa ild al t o n in sto end m 2 d g ne ed /8 in du , c c 6) st ut em ry an en D (a d t ro s D p in f sa ro G rom wn p cei yp C in lin su 1/9 er ce g m 3) am ilin tile bo ic g s-g ar d & til es yps en -m um ca a us Cement tic Fl so us nit W wa h e ov ll & do en D or f ra s N loo in ee r t Pl a g dl ile um e e s Pu & b i nc mo ng h s C C a Pa eil ar ics rti ing pet tio m ing CPI n a Sh ing ter ee ma ials t, (JULY) te C galv rial em a s C Fib Co en niz oa re nc t ed te r ( d cem ete Ret pr a of ent roo il) ile ft d roo ile G fs s M S he (Source: StatsSA; BMI-BRSCU Workings) Vi sh ets ny ee G l ti la Vi floo ng ss ny r fo W l til rt W as she es he C h e bu pa an tin ild ns d b g in an as g in in C d du op bid st pe ets ry rp Bu ild - Bu cut ipe s Producer Price Index (PPI) by type of Material: July 2011 (January 2000 = 100) in g ild to PPI OF SELECTED BUILDING MATERIALS: 2011 an ing si d B ze Bu Co oa ild ns rd in tru s C g In ctio iv i l du n En s t gi rie ne s er in g C Price doubling since January 2000 PI© BMI-BRSCU
  • 39. 39 -5% 0% 5% 10% 15% 20% 25% January Februar March April May June July 2002 August Septem October Novem Decem January Februar March April May June July 2003 August Septem October Novem Decem January Februar Ordinary and extended cement March April May June July 2004 August Septem October Novem Decem January Februar March April May June July 2005 August Septem October Novem Decem January Februar March April May June July 2006 August Septem October Novem Decem January Februar (JULY) March April May 2007 June Building and Construction July August Septem October Novem Decem January Februar March CPI April (Source: StatsSA; BMI-BRSCU Workings) 2008 May June July August Septem October Novem Decem January Februar PRICE MOVEMENT OF CEMENT AND SA PINE KILN DRIED March April May June VS BUILDING AND CONSTRUCTION AND CPI: JAN 2002-JULY 2011 July 2009 August Septem October Novem SA Pine, kiln dried Decem January Februar March April May June July 2010 August Septem October Novem CURRENT REALITY OF THE LUMBER MARKET: 2002 – 2011 Decem January Februar March April May 2011 June July© BMI-BRSCU
  • 40. 40 -10% -5% 0% 5% 10% 15% 20% 25% January Februar March April May June July 2002 August Septem October Novem Decem January Februar March April May June July 2003 August Septem October Novem Decem January SA Pine, kiln dried Februar March April May June July 2004 August Septem October Novem Decem January Februar March April May June July 2005 August Septem October Novem Decem January Februar March April May June July 2006 August Septem October Novem Decem January (JULY) Februar March April May 2007 June July August Septem October Novem Decem January Februar March (Source: StatsSA; BMI-BRSCU Workings) April May 2008 PRICE MOVEMENT OF SA PINE KILN DRIED June July August Septem October Building and Construction Novem Decem January Februar March April May VS BUILDING AND CONSTRUCTION AND CPI: JAN 2002-JULY 2011 June July 2009 August Septem October Novem Decem January Februar March April May June July 2010 August Septem October CPI CURRENT REALITY OF THE LUMBER MARKET: 2002 – 2011 Novem Decem January Februar March April May 2011 June July© BMI-BRSCU
  • 41. CURRENT REALITY OF THE LUMBER MARKET: 2002 – 2010 LOWER MIDDLE ROAD SCENARIO: 2011-2020 THE MARKET FOR TIMBER ROOF TRUSSES BY SECTOR: 2001-2009: UNITS*1000 LOWER MIDDLE ROAD SOYUZ SCENARIO: 2010-2020 (Source: StatsSA, SARB, MFA, BMI-BRSCU Workings) 8,000 7,000 6,000 5,000 UNITS*1000 4,000 3,000 2,000 1,000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 TOTAL RESIDENTIAL TOTAL ROOF TRUSSES IN NON RESIDENTIAL SECTOR41 © BMI-BRSCU

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