The problem of quality prediction is important and relevant to all economic systems. The quality of methodology of prognosis and possibilities of its correction depends on the scope and adequacy of decisions based on the knowledge of predictive indicators, foresight sectoral system. The article presents the author´s conceptual model of forecasting of development of the Russian forest sector based on the dominant role of demand factors and state support of innovative development of the forest sector. The authors identified a mismatch between predicted and actual knowledge of the industry, which complicates the implementation of innovative directions of development of the forestry sector, highlights the need to adjust forecasts and decisions based on them. When creating the forecast development of the forest sector, according to the authors, it is appropriate to distinguish 3 main phases: forecasting demand for products of the forest sector; forecasting the main parameters of economic development of the forest sector; forecasting the impact of development of the forest sector on macroeconomic performance. Implementation of the proposed steps needed to substantiate the indicators, the identification of changes which will allow quick and timely manner to adjust the forecast. The proposed system of indicators reflecting the cyclical dynamics in the Russian forestry sector taking into account cyclic recurrently, taking into account components, such as forest resources, innovations, investments, production and technology, institutional infrastructure, and social factors. The authors identified the factors and parameters of industrial development, the mechanism of formation of demand for industry products in terms of parameters of intra-industry, inter-industry and external demand. Also the mechanism of formation of the forecast of production, it justifies the features of change of output indicator as an indicator of the performance of the prediction.