Timber industry upbeat despite challenges
“Challenges facing the NZ timber industry are real and significant but the industry is generally in a good demand cycle and sentiment is positive” says New Zealand Timber Industry Federation (NZTIF) president, John McVicar.
“Domestic demand for timber is very strong at the moment” he said.
“However the upside was tempered with a number of very real challenges facing the industry.”
“Log supply shortages are chronic in some regions, such as Canterbury and Northland, and there doesn’t appear to be any change to this in the immediate future. The log shortages due to export demand in China, dairy conversions, and wind storms has reduced the forest resource available to local mills and pushed log prices up significantly. These cost increases are yet to be fully passed on and recovered in the market.”
“Timber exporters are struggling with the strong NZ dollar and exports to most markets are hard to make work. It is only the strong local market, driven by record high immigration that is providing some stability, at a time when many export markets for sawn timber are marginal” John McVicar says.
Despite these challenges and others, there is still new investment going into the industry, more so in areas where log supply was not constrained, and the overall annual sawn timber production for the country had actually increased.