Sawmills face temporary closures as construction sector demand dives

Demand for building new houses has dropped and now there is too much timber on the market. Photo / 123RF

By Susan Murray of RNZ

Several New Zealand sawmills producing housing timber are temporarily halting production, as the construction sector slows.

Forest manager and log marketer Allan Laurie said demand for building new houses had dropped in the face of rising interest rates.

As a result, there was too much timber on the market, prices were dropping and sawmills were easing off production, Laurie said.

“There are many sawmills running short time and I hear there are a couple in the North Island literally stopping larger mills. It’s not a happy hunting ground at the moment,” he said.

“Some are suggesting a month off, some suggesting having a week out here and there, stopping production.

“Of course, most mills prefer to mill to order and we’re very quickly moving from orders waiting to no orders - and that is a big concern.”

Some harvesting crews and truck drivers are not needed.

For South Canterbury-based Laurie Forestry alone, that is affecting about 70 people.

Laurie said it was the worst crisis he had seen in 50 years in forestry, particularly because of the length of time harvest crews would be out of work.

“As in our company, [we have] eight logging crews and six of them are parked, and some of them have been already parked for a month, and it’s looking like they won’t get back to work before the end of July.

“That causes all sorts of problems for those people and certainly for the private sector, where forest owners are very much harvest driven by price.”

The local sawmill slowdown had come on top of log export prices being the lowest since 2015, he said.

- RNZ