Mitre 10 New Zealand has been forced to increase its rates on building and construction products due to increasing expense pressures and domestic timber prices, according to a recent newshub.co.nz report.
A recent message sent out to Mitre 10 trade managers to help them support customers gives a checklist of rate boost notices for 2021, showing 79 Mitre 10 vendors that provide wood, steel and cement, are elevating costs from two percent to 22 percent over January to August, according to the report.
Prices for Summit Steel items climbed between 15 per cent and 21 per cent during April alone. Drymix concrete and cement product costs climbed 6.9 per cent while decking, timber as well as plywood distributor Keyland Ply increased rates by between six per cent and 12 per cent, the report stated.
One of the timber hardwood providers on the listing includes MLC Group, a producer of moulds and parts who increased its rates between six per cent and 100 per cent from May 1. The list also shows rates for Southern Pine, Stoneyhurst Timbers, Taranaki Pine, Nelson Pine and Rosvall Sawmill products that are all expected to increase by June.
Mitre 10 General Manager Solutions, Chris Peak said in the report that cost inflation is triggering prices to rise throughout all groups, including timber.
“This last year has been challenging as well and we have seen cost pressures in freight, raw materials and labour costs,” he said.
Mitre 10 is working with trade companions to try to alleviate expenses, yet some rate surges are inevitable. Peak states “in some conditions, we have no choice yet to pass them on”.
A Ministry for Primary Industries (MPI) spokesperson verified domestic demand for logs and also sawn timber continues to be solid.
New Zealand’s supply of logs has been reasonably low since October last year. Increased demand for logs, primarily from China, is driving higher timber rates and national wood processors are having a hard time to stay on par.
“There is been an increase in rate for the majority of the log processors for residential sawn wood items in February. First of all, the volume of logs provided to the mills are rather reduced. Second of all, merchants are taking on domestic individuals for the timber available. This has actually put higher pressure on residential timber costs,” the agent claimed.
Due to an increased demand from the United States as well as Australia, export costs for sawn wood remain fairly high.
ASB Chief Economist Nick Tuffley said solid demand for raw log exports, a rise in building task and decreased capacity of processors are all raising prices.
“There is a lot of demand however the supply capacity – particularly for sawn lumber – has been impacted.”