Timber shortage – spring update

The structural timber shortage around the world continues but there is hope for New Zealand.

Since my last New Zealand Certified Builders update, I have spent time in Australia with some of the largest importers, sawmillers, truss makers and builders. The structural timber issue is far worse there, mainly because Australia relies on imports for 20 percent of its needs. Most of that comes from mainland Europe, where suppliers have been diverting product to closer markets with high demand and cheaper logistics, such as Britain and the USA.

In Australia there is an added complication that it is illegal for building firms to have price escalation clauses in house building contracts. This means many are at risk of failure, and this is being compounded by limits on building activity in states such as Victoria.

Back at home, and there is undoubtedly still a shortage for some merchant outlets. Framing stocks in sawmills are very low for this time of year. However, the Level 4 lockdown in Auckland will provide a chance for the sawmills – which are generally now in Level 3 regions – to start to catch up on the shortfall. Sawmills too have lost two weeks of production, but if Auckland has, say, an additional five weeks of lockdown, then that is 10 percent less annualised demand from the part of the country that takes around half the timber. The nett effect could be to free up 5 percent of annualised supply. In the past I have speculated the shortfall could be in the 5–10 percent range, so this lockdown could help reduce that significantly if it goes on. Sawmills will use this time to re-fill the merchant yards and frame and truss plants around the country. The smart builder in Auckland would be talking to their merchant about what this means for their needs and the ability to secure earlier supply. Red Stag is starting to see many Cross Laminated Timber (CLT) projects coming through the design and consenting process. This is logical given its speed of construction, sustainability, and the fact that it is readily available now. Red Stag’s entry into the market has bought competition which has lowered the price of CLT generally – welcome news at a time when nearly everything is going up in price, including steel, which I read is up 48 percent in the last 12 months.

The other supplier from Australia is facing increased shipping costs and logistical challenges, which is also having an impact. This is a good example of the benefit of supporting local manufacturing, which is being increasingly recognised in the media now. CLT alleviates the need to build the mid-floor on site with components. It’s true that this reduces labour, and therefore the builder’s ability to charge the client. However, builders should remember that they typically make money by marking up the materials component also. Further, by completing the job earlier, it allows the build firm to move on to the next project and increase turnover that way.

It is important to factor in CLT at the design stage though. 126mm thick CLT floors need taller frames. Clear spans can be over 5m with terraced houses and apartments with CLT. Consider CLT if you have a lot to build or are having trouble getting wides and flooring material to make your own floors, and you have some control at the design stage. Finally, keep an eye out for glulam lintels from Red Stag too. These should hit the market in the next month or two and will help fill the timber shortage and lower construction costs.

Red Stag Group CEO Marty Verry (left) with NZ Police David Houston, inspecting CLT floors destined for a project in Palmerston North.

Marty Verry, CEO, Red Stag Group. Red Stag Timber is an independent, privately owned timber company, based in Rotorua. It is currently New Zealand’s largest sawmill, focussing on producing high-quality timber products for the residential and commercial construction markets in New Zealand, Australia, and the Pacific Islands. A recent addition to their production portfolio is Cross Laminated Timber. For more information visit www.redstag.co.nz