Treated deck wood can shrink, despite misconceptions to the contrary. Pressure-treated wood is rot resistant, but it is not resistant to moisture, according to the University of Massachusetts at Amherst. Pressure-treated wood can shrink, it can move, twist and crack and it can expand, tearing itself apart. This happens, due in large part, to its constant absorption and release of moisture. Ipe Decking in Atlanta, Georgia, notes that all tropical hardwoods, air-dried and greenwood will shrink as they lose moisture.
Certain types of wood are less prone to shrinkage than others. Some are more durable against other types of weathering effects. Cedar is one wood that tends not to shrink as much as others, but it is not the most durable wood and it requires a considerable amount of regular maintenance. Pine is known for its durability, especially yellow treated pine. However, for many it does not have the same decorative appeal as cedar. If durability is your primary concern, synthetic decking materials or plastic lumber is your best bet.
If you don't mind the additional maintenance, then a deck made of natural wood will provide an economical and practical solution. The key to keeping any type of wood from expanding and shrinking due to moisture is to treat the wood with an external sealant that will bind with the wood and make it more moisture resistant. This won't necessarily make it completely impervious to water, but it will come close. Applying sealant once per year will help maintain the strength of the wood and its resistance to shrinkage in the long run.
Wood shrinkage is also an important consideration when it comes to deck installation. Pressure-treated wood decking planks are not spaced very far apart because the space increases as the wood shrinks over time. Because it shrinks less, cedar planking is spaced a little further apart and as uniformly as possible. Even synthetic woods are somewhat susceptible to the absorption and release of moisture, so installing these also requires some accommodation through spacing.