Supply chains, weather and high demand all put pressure on timber supplies
While we continue to see supply shortages and price increases across the timber and building materials market, I would like to give you some background on these issues to help you understand the situation.
- The port strikes over Christmas 2020 were the first interruption to supply. Boats were forced to other ports, prompting the shipping companies to double their container rates. Our imported goods suppliers copped a massive increase and the first wave of delays hit our supply.
- Since COVID, we have seen a big growth in DIY home renovation, a rising housing market and very low interest rates. This has prompted a building boom. Our local supply has never been able to fill our market needs without relying on imported product.
- The bushfires burnt up to 40% of plantation timber in some supplier’s harvest. Then a very wet summer cut production by 10-20% as trucks and logging equipment were unable to enter the forests due to unstable ground.
- Global demand is probably the biggest factor with price increases (not that we needed any more). Every developed nation in the world has stimulated their economy with grants and funding in the construction industry. With record new home approvals, the rush to secure fibre and log to supply their market has created a bidding war with wholesalers.
I expect to see prices to keep increasing for the next 6 months, minimum. There are massive back logs still to be filled. The American market is just at the beginning of their housing boom.
Things will settle and balance out. We just have to be patient, organised and flexible over the next 6-18 months.
Thank you for your understanding in these unusual times.
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