10 March 2010, Sydney

The decline is mainly a result of the global financial and economic crisis and the report says regional consumption should remain stable through to 2013 given the reduction in production capacity resulting from the decommissioning and closure of several plants.

New Zealand was one of the hardest hit economies during the global financial crisis. GDP is estimated to have declined by 1.3 per cent in 2009.

In the coming years New Zealand will benefit from strong growth in Asia, with GDP growth ranging from two per cent to more than three per cent annually from 2011 to 2013.

As there has been no new announced plans in Australia or New Zealand it has been assumed that there will be no new production facilities established in this region over the forecast period. Plants appeared to be operating at very high (91 per cent) levels of capacity in 2009, and this suggests that there is scope for expansion. However, while both countries have a sizeable raw material resource, much of it is allocated to other uses such as production of sawn timber, log exports and wood chips, and both countries are net exporters.

Annual growth in consumption is forecast to range between one per cent and three per cent over the four years to 2013 as the economy and building industry move into an upward phase of the cycle.

The MDF industry in the Australasian region has become much less dependent on exports over the past two years. In 2006, New Zealand exported almost 85 per cent of its production. In 2008, this number fell slightly to 76 per cent. The decline reflects weaker demand in export markets, and a lower level of domestic production capacity. However, New Zealand will remain highly dependent on exports, although Australia is becoming much less dependent on the export market.