Timber industry challenges: Rising costs and global headwinds test resilience

Building consents are down 20,000 since 2022. Photo / Mark Mitchell

By Kate Green of RNZ

The timber industry is battening down the hatches, as it struggles with low demand, increased running costs, and wars and tariffs overseas.

Carter Holt Harvey has announced plans to shut its Eves Valley sawmill near Nelson and consolidate its operations to Kawerau in Bay of Plenty, blaming weak markets.

The closure would affect 142 jobs.

Timber Industry Federation executive director Jeff Ilott told RNZ demand had dropped, with building consents down from 51,000 in 2022 to 34,000 in the year to June.

The lack of demand, combined with increased running costs from electricity, compliance and insurance, meant sawmills felt the squeeze.

The overseas markets were also unstable, due to conflict and tariffs.

“Hopefully, we might see a bit of a glimmer of light in the future in terms of building consent numbers starting to climb again, but really, it seems like a distant thing at the moment,” Ilott said.

“It’s just batten down the hatches and try to do the best you can.”

He said the loss of sawmills could be devastating for small towns, where they were often the largest employer, but despite the tough times, most mills were family businesses, and people would not walk away easily.

“Some mills in New Zealand are now into their fourth and fifth generation, so they don’t walk away from that sort of lifetime commitment lightly.”

- RNZ