The southern region's forestry industry is looking positive with good demand and better economic returns for logs from China and South Korea, Southern Wood Council chairman Grant Dodson says.

While forestry contractors and sawmill operations lost income for a month during the Covid-19 lockdown, he was not aware of any businesses closing permanently nor any staff losing their jobs in the region.

"Some businesses have been under financial stress after being off work and contractors' incomes stopped for a month, but largely they passed on the wage subsidies to staff, and that went well, to the best of my knowledge," Dodson said.

The industry started operations again when the country moved to Alert Level 3.

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Otago and Southland do a limited amount of domestic processing, but the biggest export markets are China and South Korea.

Covid19.govt.nz: The Government's official Covid-19 advisory website

The sector had been fortunate as the weak economic conditions just prior to lockdown improved because there was a reduction in logs coming out of New Zealand at that time as the industry ceased activity for five weeks, he said.

"China was overstocked."

However, China's log levels had reduced and South Korea, in particular, "was now pretty short of logs," he said.

Southern Wood Council chairman Grant Dodson. Photo / File
Southern Wood Council chairman Grant Dodson. Photo / File

Both countries were now in a restocking phase and that, combined with cheap international shipping rates meant "good solid market prices and lucrative economic conditions".

"I think economic outcomes are likely to be very good and we are expecting a reasonably positive period [to come]," he said.