Slowed housing demands sees timber stockpiling nationwide

by | Feb 26, 2024

 

Australian Forest Products Association New South Wales Chief Executive James Jooste says there is a steady build-up of timber in timber yards across Australia, due to the lack of progress around the country towards making housing targets.

Timberbiz reported that the slow release of land, slow approval rates for loans and houses and economic factors, including high-interest rates, have all had a major impact on timber supplies for some months.

“What has emerged is we have got these ambitious targets, that we need housing, yet we have got timber sitting in mills, which is an indicator that things are moving,” Mr Jooste said.

“We need a roadmap and a steady plan for how we are going to get to these housing targets, we need to make sure that we get out of these boom and bust cycles for the industry because we are seeing significant capital investment being made by mills.”

“The timber industries continue to be a strong employer of local workers in our regional areas, in our manufacturing areas, in the downstream employment that created our construction sector, but in order to retain those workers, to enable a steady platform for business investment, and for that capital investment, we need to make sure we have a steady increase in the housing construction market, and not go back to these boom and bust cycles,” he said.

Associated Kiln Driers (AKD) Softwoods Chief Executive Shane Vicary said the company’s Tumut mill at Tumut was processing 500,000 cubic metres of logs but that had fallen to 250,000 cubic metres.

AKD is the largest sawmill company in the country, producing about a quarter of the nation’s timber consumption, yet even they are seeing less and less activity from buyers.

“This mill is doing half the volume that it used to do, and it will do half for the next 20-plus years, based on the fact that those logs got burnt,” Mr Vicary told The Australian recently.

Yet, despite this dramatic reduction in production, he said timber continued to sit on the shelf without being sold.

“We cannot get enough people to buy the timber,” he said.

“At the moment, most of our employees are earning less because there is less activity – we have got overtime bans, we have got employment freezes.”

New South Wales Premier Chris Minns has admitted the state would not meet its target this year in contribution to the federal government’s ambitions to build 1.2 million new homes in the next five years.

This is a significant shortfall as Mr Jooste said New South Wales carries the majority of the housing construction industry.

“So, we feel the boom and bust cycle because as a state, we are most exposed to it,” he said.

“But these handbrakes that have been put on the economy are nationwide, and those timber mills, across the country will all be seeing a similar picture, as we are in New South Wales.”

“But we need to make sure we continue to keep a focus on fixing – working hand-in-hand between local government and state government around how we are getting the planning process right.”

“And we have to give credit to the state government in New South Wales for doing that and identifying those issues, and then making sure we have a stable business and operating platform for our meals to continue to produce the timber that we rely on,” Mr Jooste said.