Experts says government intervention not the solution to fix New Zealand’s timber shortage

A timber shortage in New Zealand is a result of several factors including the closing of a number of timber mills says an expert, who is warning against the Government intervening.

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AUT’s John Tookey expert said it was hard to know how much timber there was in the market. Source: Breakfast

It was reported over the weekend that Carter Holt Harvey had decided to stop providing structural timber to a number of big building supply retailers as a result of a major increase in demand for the material.

Mike Craig, the owner-operator of Kapiti-based Mike Craig Builders and chair of NZ Certified Builders, said it was hard to know how much timber was available because of uncertainty around how much was being stockpiled.

“A lot of business use batches of product, so the batches of product, they’re behind on so they’re on a continual catch-up and because we’re busy they’re continually selling out,” he said.

Concern grows over impact of timber shortage on New Zealand's house building industry

Craig was also wary of when Carters would return to the market.

He had never seen this situation before in 40 years of building and believed the economic effects of the Covid-19 pandemic was largely to blame.

AUT's Head of Built Environment John Tookey says there is more to it including the closure of a number of timber mills over the years.

“We’ve been closing timber mills for years, we’ve been gradually reducing our capacity as a result of streamlining, if you want to call it, right-sizing is another wonderful phrase,” he said.

“No one wants to over-produce because if you over-produce you end up with a glut of material.

“It wasn’t so long that we were going to deal with a wall of wood, All of a sudden what happened to the wall of wood I’m not quite sure, it’s still there.”

Tookey says there is no way to rapidly increase production.

“When you’ve gone back to a certain level of production, it’s very hard to then ramp it back up, it’s hard to get back on track and this is what we’re seeing,” he said.

“Lots of folks who were working there [at mills] have moved, they’ve picked up new skills.

“Re-establishing production facilities doesn’t happen overnight either, just say we’re going to switch it back on, it doesn’t happen that way.”

The past should make the Government wary of trying to solve the issue, Tookey said.

“History is peppered with instances of government interaction and government intervention within all sorts of different industries, it doesn’t usually end that well,” he said.

“As soon as you create one intervention, you then generate another intervention down the track, if you put your finger on the scale over here it creates another issue down the track.

“They ain’t going to be able to do anything, not in the short term.”

The timber shortage is altering how builders are planning jobs, Craig said.

“The secret is planning ahead, I know a lot of builders are taking on more work than they need just to move their guys around from job to job,” he said.

“Of course it’s increasing the time that we’re on jobs that we’re building but you have to, because if you have product to build, you need to find other work.

“It is stressful, you take on more work, it’s more project managing.”