Other niche markets, such as prefabricated houses and hardwood interiors, also show great potential. Promotional efforts seeking to attain a more secure long-term position may wish to focus on some of the niche markets described above since consumers have already demonstrated a higher degree of acceptance. This is due to the fact that New Zealand's domestic market is relatively small and stable. Forestry products are now New Zealand's third largest export sector. In global terms, New Zealand is a small player in the international forest products market, accounting for 1 percent of the world's total supply of industrial wood and 1.2 percent of the world's trade in forest products.
Modest opportunities do exist for exports of U.S. hardwoods to New Zealand.
An industry funded marketing organization, Wood New Zealand, has been launched to assist New Zealand forest products exporters. Wood New Zealand opened their first office in Shanghai, China in July 1999. Next year, they are planning to open an office either in Japan or the United States. Although its inflation remains among the lowest in the industrial world, New Zealand's heavy dependence on trade leaves its growth prospects vulnerable to economic performance in Asia, Europe, and the United States. The 1998 market downturn in Asia, particularly the significant downturn in the export log trade to Korea, has encouraged the New Zealand industry to seek out new markets and diversify further into value-added products.