Australia's housing sector is providing the basis for robust demand for structural wood products in Australia, according to new research.

The ABARE-BRS publication Australian Forest and Wood Products Statistics released today found that domestic demand for structural timber products increased significantly due to housing demand across Australia, which grew by 25 per cent in 2009-10.

ABARE-BRS Executive Director, Phillip Glyde said "This provided support for the domestic sawnwood and wood-based panel sectors, with consumption of wood-based panels rising by 2.8 per cent over the year."

However, there were some signs of weakness in export markets for forest products.

The value of Australia's forest product exports decreased by 3.6 per cent in 2009-10, continuing the decline that began in the middle of the last financial year. Much of this decline was led by continued weak demand for Australian woodchip exports, the value of which fell by 14 per cent in 2009-10.

"Most of the decline in woodchip exports was from Tasmania, while woodchip exports from the hardwood plantation regions of Western Australia only declined marginally, reflecting the preference for plantation woodchips particularly in Japan," Mr Glyde said.

"There are signs of recovery in some export categories, for example exports of veneer continued to increase and log exports to China almost doubled to around 1 million cubic metres.

"Future challenges for Australia's forest industry include the rising Australian dollar, which is making imports more competitive. Most of the growth in demand for wood-based panels was met by imports in 2009-10."